9 Inventory Management Challenges and Solutions for 2022 and Beyond


Inventory management is the procedure of organizing and handling stocks through the supply chain. The goal of inventory management is to reduce the cost of holding inventory while keeping stock levels consistent and receiving products into customers’ hands faster. Inventory management is crucial for a flourishing retail business.

The global inventory management system market is estimated to reach USD 4602 million by the year 2028 at a CAGR of 7.7 % from the year 2022 to 2028. The warehouse management solution allows companies to maximize their labor, space utilization, and equipment investment by coordinating and optimizing resource usage.

What is Inventory Management?

Inventory management is the system you develop to organize inventory through the supply chain. It covers everything from raw products to finished products, storing, and selling. It also tracks and supervises their weight, dimensions, amounts, and locations.

Warehouse inventory management is the procedure by which stock is stored in a warehouse or other storage facility.

The goal of inventory management is to reduce the cost of holding inventory by assisting when it’s time to refill the products or purchase more materials for manufacturing them. This helps in maintaining inventory levels and reduces costs.

Why is inventory management essential?

Inventory management shows how to run your business, cater to your customers and increase your sales. Here are the reasons why inventory management is essential:

Run your business smoothly and efficiently

Some small businesses depend on manual counting stock to track what’s in the store, but it is tedious and time-consuming work. Therefore placing a system that makes the work easier.

Keep consumers satisfied

Inventory management helps:

  • How quickly you can avail your goods to customers
  • In how much time you can fulfill orders
  • How much visibility you can give to your customers

Most customers are likely to return to your place if they know your reliability, consistently deliver orders on time, and let them know what new products are available.

Grow your business

As businesses grow in complexity, inventory management gets more complicated. With the inventory management system, you can grow your business and you can analyze the performance of salespersons, reduce time and manpower.

Common challenges in Inventory management

Supply disruption

In this pandemic, we have seen how global supply chains can decrease or break down, especially if they are not built for resilience. Previously all businesses gave priority to efficiency and cost savings over resilience.

After the pandemic, businesses are now concentrating on mitigating the risk from supply disruption by switching to local suppliers, developing supply chain risk management teams, and processes, and enhancing transparency.

Warehouse efficiency

The Warehouse management system controls warehouse labor and involves several steps including receiving and putaway, shipping, and packaging. The challenge is to perform all the tasks in the most effective and efficient ways.

With the help of warehouse management software, it is easy to boost the efficiency of a warehouse.

Demand and market volatility

This is one of the main challenges during the pandemic, it deals with the uncertainty in terms of demand, market trends, and consumer behavior. Such irregularity and uncertainty can lead to multiple instances of excess stock when demand falls or a lack of products, or when the demand for specific goods increases suddenly.

Changing Demand

Consumer demand keeps on changing continuously. Storing too much and then being unable to sell can result in outdated inventory, and if you keep stock in small amounts it could lead to disappointed consumers.

Therefore strategies must be developed for ordering as well as technology to develop an inventory plan that can help compensate for changing demand.

Manual documentation

Managing inventory with paperwork and manual processes is complex work and also not secure. And it is not easy to scale across numerous warehouses with ample stocks. Warehouse management solutions can assist you in handling manual documentation.

Managing warehouse space

Handling space effectively is a terrifying task. Planning and designing warehouse spaces with inventory management mediums that assist you to control the timing of new stock deliveries. It can account for essential factors like available space.

Lack of expertise

It is difficult to find skilled inventory managers who are used to advanced technology and can enhance inventory strategy. Upgrading your inventory platform is not just enough, it needs proper management.

Expanding product portfolio

Many online retailers have removed the requirement of large warehouse distribution centers. These strategies make it easier to enlarge inventory and diversify product portfolios but demand technology and resources for shipping and tracking.

Lack of communication

Communication is necessary for any business, whenever any department is not interested in sharing information, it makes recognizing inventory trends and searching for ways to enhance business.

Solutions to control inventory management challenges

Fix supply chain disruption

Track supplier data and monitor shipment errors, defective or broken products, and missed delivery appointments, with measuring service levels and based on suppliers’ performance fix and find supply chain disruptions, lessens complexity, and streamline logistics.

Transparent Performance

Measure and report warehouse performance metrics such as customer satisfaction, and order processing speed to overcome warehouse inefficiencies. And you can also share data reports with employees and suppliers.

Use advanced analytics

Dealing with critical challenges like demand and market volatility one must collect the latest data on market and consumer trends and stock all the goods and products as per advanced analytics.

Predict Demand

Few inventory management platforms include demand forecasting tools. This warehouse management software merges with accounting and sales data to help you predict demand and schedule orders based on predicted demand and scheduled orders.

Adopt paperlessly

Give employees the appropriate inventory tools for the job. Replace manual documentation with software and paperless transactions for invoices and purchase orders.

Optimize space

Utilize inventory systems with warehouse management features to optimize storage space and inventory flow. Classifies inventory storage down to the shelf, and compartments, automates order delivery, packing, and shipping workflows.

Outsource expert

Consider outsourcing to an expert in inventory management. Sign a contract with experts and offer online support to assist employees, following all the best practices for working with technical warehouse management software.

Different locations warehousing

Use different location warehouse management software features to track and control enlarging inventories. Also must take benefit of receiving and putting away plans with automated inventory tracking alerts and planning features that keep tabs on warehouse location.

Collaboration of dashboard

Introduce dashboards with an easy interface that shows real-time inventory data. Having everything on one screen helps remove communication barriers across accounting and sales and warehouse operations.


With the right inventory management system, you can automate business processes, enhance inventory practices, and improve customer experience. This blog was all about challenges faced by inventory management and how to overcome them.

Investing in excellent inventory management software powered by next-generation tech like AI is essential as it will boost your business.


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