How to Overcome Inventory Inefficiency

Avoid inventory inefficiency and lost sales by implementing these four strategies and working with the right technology partner.

Jonny Parker
February 1, 2024

Inventory inefficiency can have severe financial consequences for your business. It can lead to stockouts, which contributes to missed sales and lost customers. According to a Signifyd report on the state of commerce, 40% of e-commerce customers will leave their go-to brand for competitors if items aren’t in stock.

It can also lead to overstocking, which ties up capital in stock that could be used in other business areas, such as marketing and operations. That’s not to mention the increased holding costs, which can erode profits.

The good news? It can be overcome with the right inventory controls. We will show you how in this guide.

P.S. If you’re short on time and want to learn the top 4 ways to avoid inventory inefficiency today, scroll to the last section.

What is inventory inefficiency?

Inventory inefficiency refers to poor inventory management that leads to various issues, including insufficient inventory levels, waste, higher carrying costs, and various operational challenges. Examples of inventory inefficiencies include:

  1. Overstocking due to inaccurate demand forecasting, inefficient ordering practices, and outdated technology makes it hard to adjust orders based on demand.
  2. Understocking due to inefficient demand forecasting and poor safety stock management.
  3. Poor forecasting because of forecasting methods that aren’t data-driven.
  4. Human errors due to a dependence on manual processes where people perform tasks us