Inventory management problems, common challenges and solutions

Inventory management is an essential process in many different businesses ranging from retail to manufacturing. Good inventory management is critical to the success of this business. Improved inventory management improves cash flow and reduces expenses. Some inventory management problems are common across industries.

The most important challenges in inventory management

vision problems

When your inventory is hard to find, you have problems seeing inventory. Lack of visibility is one of the most common inventory management problems. Locating the right item in the right place as quickly as possible is essential to inventory. If inventory is hard to find as part of the manufacturing supply chain, it can affect the operations of the entire manufacturing process. If the inventory stock for shipment is reached and cannot be located, it leads to incomplete or wrong shipments and severely affects customer satisfaction. In both cases, inventory visibility issues have a severe impact on business performance and are a symptom of poor inventory management.

No real-time reports

Inventory reports are essential for making decisions. The inventory department cannot summarize and report based on real-time inventory data when using a manual system. It is also difficult to quickly report on historical trends. When management cannot visualize inventory or stock trends, making informed decisions about purchasing and inventory becomes difficult. This directly affects the bottom line of the company.


Managing inventory manually is a cumbersome and cumbersome process. Even routine tasks get slower than they should be. As companies expand, the process becomes more sluggish and inefficient. Manual inventory management becomes more and more difficult to implement across multiple warehouse locations. Ineffective inventory management slows down operations. Inventory management issues that cause products to ship slowly lead to lower customer satisfaction. Even when using software solutions, improperly designed or outdated systems do nothing more than simply duplicate the manual process of inventory management. Inefficiency and redundancy are some symptoms of poor inventory management.


Money spent on inventory is locked if items are not used. Overstocking can affect the profitability of the business. This is because more inventory is being bought than sold. Inventory management to store the right amount of items is essential to the financial well-being of a business. Overstocking also leads to a buildup of obsolete inventory. This is the material that was purchased or stored in excess and is no longer required. In a manual system, this inventory may be abandoned or forgotten. When it is in demand again, the company may buy more of it instead of using what is already in stock.


Inventory shortage is also one of the problems of inventory management. In manual systems, the identification of items that need to be rearranged depends on the vigilance of the people managing the inventory. When there is a slip, the company may find itself insufficient to meet the demand. In the supply chain, inventory management fuels the entire production process. A shortage of inventory can slow or even stop production. Also, not making use of the available warehouse space wastes money. Improper inventory management does not make the best use of all available storage space for which the company pays or incurs overhead costs.

Unpredictable trend

Trend forecasting is essential to running a business. Inventory stock projections and forecasts are accurate when they are based on actual numbers and trends. Manual systems cannot deliver summaries and reports quickly. Inaccurate forecasting of trends may also result in a company not anticipating seasonal rises and falls in demand. The lack of historical data to predict trends is essential to avoid overstocking and understocking.

central deficiency

Centralization is not an issue in small businesses, as all their inventory is stored in one place. As companies grow, they expand their inventory to different locations. Manual maintenance of inventory records makes it very difficult to communicate and access inventory data across sites. Manual reports and lists do not show stock inventory in real time. Offline data is often the cause of delayed or incorrect charging. It is also impossible for management to get an accurate, real-time report on all their inventory across sites.

How inventory management software can help you overcome challenges

Improve visibility and transparency

Implementing an inventory management solution like Tally helps you easily locate any required item. It also provides you with complete data about the required item and its availability. The ability to locate inventory items improves company efficiency. At the management level, the ability to visualize inventory helps make better decisions to streamline the process. Managers can easily visualize past trends and build their forecasts and plan on actual numbers.

Increase customer satisfaction

More transparency also allows the company to measure the efficiency of inventory management. They can see how stocks are flowing through the system and identify bottlenecks. In companies that ship to the customer directly from stock, customer satisfaction can also be measured based on shipping speeds. Accuracy in locating and shipping items will also enhance customer satisfaction.

Inventory analysis in Next Prime

Increase in productivity

Inventory management software improves the efficiency and productivity of all employees involved in inventory management. Any stock items can be easily found without having to search manually. Scaling up of operations does not cause inventory management problems when using an inventory management system. Computerized inventory management also allows you to not use paper if you wish.

Accuracy in recording and tracking inventories

Inventory management through inventory management software reduces human error and provides accurate and up-to-date data. A computerized inventory management system like Tally lets you know exactly where your inventory items are. Inventory data is updated and accurate in real time.

Easy to manage and keep track of inventories

When you use an inventory management system like Tally, you have better control and control over inventory levels. You can easily keep track of which items are stored unnecessarily. Even if you have old stock, it is tracked by the system to avoid buying more of what you already have.

Learn about fast-moving and highly profitable stocks

When you can visualize and study inventory movement and profit margins, it helps you identify fast moving items as well as items that bring you a better profit margin.

profit analysis

Profitability analysis by inventory items in TallyPrime

No need to worry about out of stock or overstocked

Inventory management shows you which items are below the specified reorder level. You can immediately order the required materials so as not to fall short.

Reorder the level in TallyPrime

Reorder levels on TallyPrime

Insights from reports help you In timely business decisions

And easy access to reports that analyze inventory over time enables the company to better predict trends and manage inventory accordingly. The decision-making of the company becomes driven by the truth.

Communication and centralization

Inventory management with an integrated solution like Tally helps centralize inventory data. It also allows inventory data to flow seamlessly between sites. Therefore, the system is fast and efficient even when something out of stock is shipped across locations. Tally also helps in controlling inventory in different storage areas. Inventory can be easily managed across different warehouses within the same location or across geographies.

Cost optimization at all inventory levels

Inventory management through software like Tally is also a good measure of cost control. Effective inventory management prevents mishaps such as overstocking that locks up valuable capital. The software enhances the productivity of inventory management and warehouse staff. The program also allows you to optimally use your storage space. Empty and unused warehouse space is a waste of money that can be prevented by properly visualizing and identifying inventory.

Help you get rid of the risk of old and expired stocks

Merchandise that stays in stock for a long time is a waste of money too! Effective inventory management helps you achieve this ideal inventory balance to reduce costs and increase profits.

Aging analysis in TallyPrime

Switch to a smart integrated business solution with inventory management like Tally to get the most out of your inventory and warehousing operations. It will make a huge difference to the efficiency, productivity and profitability of your business.

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