The distribution center is the heart and soul of most retail operations, both for warehousing and for the supply chain.

No matter how you sell products, whether you serve retail outlets or sell directly to the end consumer via an online storefront, distribution centers are frequently a destination for products along their journey, and keeping their inventories accurate and adjusted is crucial to ensuring your whole supply chain rolls along smoothly.

That said, there are issues that distribution centers can encounter when it comes to tracking and managing inventory, and getting out in front of these issues will go a long way towards preventing order errors and missing items.

Here’s four of the most common distribution center inventory issues we’ve seen:

Miscount of damaged items

Nobody wants to see items get damaged, but accidents can happen in transit or in storage, and knowing how to handle these damages will help your warehouse as a whole. A common mistake is when damaged items get counted as part of a cycle count or overall inventory count, and then removed from the active inventory, causing a discrepancy in the on-hand number of goods. The fastest way to prevent this is to have employees actively seek out damaged products, and then creating a new section of wire shelving, steel shelving, or metal shelving to hold onto damaged items without including them in the main inventory count. This may include shrinking the items out as soon as they’re discovered, but it’ll help a lot in the long run.

Incomplete re-shelving procedures

Similarly, when items get returned, are picked incorrectly, or need to go back into storage, they might not get counted correctly due to their current location. When returning items to the shelves or the pallet racks, make sure these items are tracked as being part of the active inventory. Otherwise, you may run into overages elsewhere or incorrectly process returns as the item isn’t in its normal location yet.

Inactive items taking up space

Inventory miscounts are a common issue in distribution centers due to items not being returned to their primary location, and these can cause both inventory issues and misused storage space that could be better given to items that are actively being sold. Make sure to designate a specific area for inactive or returned items, and train your staff on how to handle these items when they come in so they’re represented correctly in the inventory.

Bins that exist on shelves, but not on paper

If your distribution center deals in small parts like hardware or technology, it can be easy to create a storage bin to store these items that isn’t actually reflected in the on-hand inventory report. This may require a one-time counting of each individual piece, but many inventory tracking methods allow for the counting of a total storage bin instead of the individual parts in the long run. Making sure these items are reflected on the inventory report one way or another is crucial for making sure your overall inventory counts are done properly.