Inventory errors are a costly and persistent challenge faced by warehouses and distribution centres. While overstock ties up capital and increases storage costs, stockouts disrupt fulfilment schedules and impact service levels. Recent research found that 99% of UK retailers lose at least £10,000 in revenue each quarter due to unsold stock, with nearly half of all inventory eventually sold at a discount to clear overstocks (InternetRetailing). Stockouts, on the other end of the spectrum, lead to missed sales opportunities and customer dissatisfaction, a problem caused by “ghost stock”, where systems show items available that actually aren’t (InternetRetailing).
For businesses already under pressure from rising energy costs, labour shortages, and ongoing supply chain disruption, these inefficiencies quickly add up to substantial losses.
Common Causes of Inventory Errors
Some of the most common reasons inventory inaccuracies typically arise include:
Manual Processes – Relying on manual processes is often error-prone and extremely time-consuming. Automation, like automated stock management software, can be utilised to streamline aspects of inventory management, from real-time stock visibility to generating purchase orders. Investing in a robust automated solution can result in significant time savings and reduce the likelihood of human error.
Human Error – When relying on manual data entry, human error is inevitable. Simple mistakes can often lead to inaccurate stock records, which can ultimately lead to more serious problems. By introducing a solution that enables barcode scanning and automated data entry, businesses can minimise errors and improve accuracy.
Lack of Forecasting – In order to maintain optimal stock levels, it is vital to forecast accurately and replenish timely. Failing to do so can lead to costly overstocking or stockouts. Using an automated solution to regularly review previous reports and sales data can help to forecast accurately and prevent the risk of overstocking or stockouts.
How Automation Prevents Inventory Errors
An inventory management software solution automates stock related tasks and provides a clear view of stock. Barcode and RFID scanning can improve data accuracy by removing the need for manual data entry, which often results in errors. With real-time inventory data to hand, organisations can ensure their supply chain and storage facilities are all aligned. Inventory management software can also send alerts warning of discrepancies and items at risk of becoming dead stock or reaching their expiry date, and integration with POS and ERP systems allows for easier and more accurate procurement and replenishment.
How Roman Originals Streamlined Returns with Automation
Roman Originals, a leading UK fashion retailer, faced challenges handling around 10,000 daily returns manually. The process was slow, error-prone, and labour intensive. By implementing an automated returns management system from KMsoft across 40 handheld devices, Roman Originals reduced sorting time, improved inventory accuracy, and freed staff to focus on higher-value tasks (Roman Originals Case Study).
Inventory errors impact margins, damage customer trust, and slow down operations. With the right systems in place, errors can be anticipated and prevented, enabling retailers and warehouses to cut down on waste, control costs, and build a more resilient supply chain.
KMsoft’s inventory management software, StockAssist Industrial, is designed to give warehouses and retailers full control, from real-time stock accuracy to automated returns handling.
