Top 5 Challenges of Inventory Visibility

When your inventory is hard to find or identify in the warehouse, it results in incomplete, inaccurate, or even delayed products or service fulfillment. Receiving and finding the right stock is vital to efficient inventory management and great customer experiences.

The more the merrier?

Inventory visibility seems simple in meaning. It means knowing what you have on hand and where that inventory is located at any given moment. However, If we look deeper into it, we will realize that it is actually that thing that connects the most crucial aspects of inventory management.

So how does it affect the business when there is a lack of inventory visibility? After we talk about the benefits of inventory visibility, let’s also talk about the challenges. There are lots of negative impacts a lack of visibility can have on any business operation but these are the top 5 challenges your business has to deal with if you have little to no visibility over your inventory.

Challenges of Inventory Visibility

Does your inventory look like this?

1. Prolonged shipment/turnaround times

It’s not enough to know whether you have an item in stock, you also need to show where these items are located. In some cases, fulfilling orders can be cumbersome. There is a lot of pressure in processing orders when you have challenges in looking up the availability of the inventory, and if there is an available inventory, how long the fulfillment team can locate the available inventory and ship them?

This applies to rendering services as well. Spare parts or van stock inventory are pretty small but still hard to manage. Why? Because they move around a lot in multiple locations. If you lack visibility and can’t locate things in the fastest way, you will then have a higher turnaround time.

2. Excessive safety stock which increases inventory carrying cost

You can never opt out of the inventory carrying cost. It plays a very good role in management but it can be a big risk to the business when not monitored. Problems with excessive inventory start when there is no visibility on the actual number of items available, and when there is no confidence about the number of items on hand. You will start buying more buffer inventory which will lead to product piling up.

Inventory visibility can help a lot in minimizing costs like this. Visibility gives confidence that you have the right amount of inventory available at the right time.

3. Risk of Underselling and Overselling Inventory

The risk of underselling and overselling happens in businesses with multiple locations and channels. When there is not enough inventory data that shows all the available inventory in all warehouses and channels, we tend to either oversell or undersell. 

We usually undersell when we are too scared that we go beyond the inventory threshold. Oversell, on the other hand, happens when we are too confident in the number of the inventory we have on hand and we keep on selling items that are no longer available.

It is good that a business has a set inventory threshold and even better the threshold is distributed across the business operation. This means we have centralized access to our inventory data. There will be no mismatched information on inventory levels and we can also leverage our stocks in every location.

4. Inventory Loss or Shrinkage

There are lots of causes of inventory loss but the most common is the lack of inventory visibility. When we do not have visibility over our inventory, we are already opening an opportunity for products to be stolen or damaged without any accountability.

5.  Poor communication and data management

When our business expands and starts to have multiple warehouses and storage locations, it becomes more and more difficult to communicate the reports of one location to another. The separation of data for each location may lead to a lack of visibility and goods stacking up in your storage. 

Good communication starts with good inventory data management. An inventory management system or unified inventory management allows us to have a bird’s eye view of our operations and eliminate other challenges in managing our inventory. When everyone is looking at the same thing, management becomes simpler. There will be no discrepancies between different people’s assessments of the inventory data. Everyone in the company has access to the same data and can make data-driven decisions for the business.

Why you should use an inventory management system?

An inventory management system makes everything easier but the most important feature that a system can offer is inventory visibility which we now know, a very important and usually cannot be done perfectly by people. 

The convenience being offered by an inventory management system exceeds the small investment that will come out of your budget.

Learn more about the real Inventory Visibility and try it for free HERE!


Published by Claude.Rivera

I have a passion for new things. It excites and challenges me. Reading and writing take me to different worlds. Literally, escape. I'm a dancer wannabe and a not-so-pro gamer.

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