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Few words can ruin a warehouse manager’s day faster than “we’re out of that item” – aside from, perhaps, “we’re always out of that item”.

While being out-of-stock on various goods is just par for the course, especially these days as we continue to recover from the supply chain issues brought on by the pandemic, being chronically understocked in popular items can cause a lot more problems to your warehouse’s income and operations over the long term.

Much like with any understocking, this issue can be avoided with a little preparation and foresight – but how do you know where to start?


What Causes Understocking?


Inventory management can take many forms in warehouses of any size or vertical, but the focus is often placed on accurate counting and prevention of order errors, which means other potential issues may fall to the wayside. 

Understocking is one of these issues. If you find yourself frequently running out of the same goods, or typically find yourself unable to source replacements for an item you’re currently out of, these may all be contributing factors to the issue:

  • Inaccurately predicted customer demand/sales forecasts
  • Seasonal factors causing an item to change in popularity
  • Smaller restocking orders on certain items
  • Issues with inventory tracking, leading to items being mis-ordered or not replaced in a timely manner

If you find yourself frequently running out of the same few items (or even one very popular item), any combination of these factors may have been the cause. Careful review of your warehouse inventory processes could uncover some of these issues before it becomes a more widespread problem with your counts.


How Can You Prevent Repeated Understocking?


Frequent understocking of the same few items can often be prevented, or at least lessened, by being more vigilant about your current inventory management processes. 

Improved inventory tracking

In many cases, understocked items can be simply due to an error in the inventory management process. Review these processes with your team, and work to understand their daily reality – are there any frequent pain points they run into? Are certain items harder to find or restock due to their placement on your warehouse shelving? Is a barcode error causing something to be scanned incorrectly? Are some goods just getting missed due to a process oversight? Asking yourself these questions can help you better understand the needs of your team, and prevent additional errors down the line.

More accurate forecasting

Maybe it’s because of a big online trend, maybe it’s because of seasonal demand ramping up, maybe it’s just because everyone needs one to live their lives, but whatever the cause, items don’t sell out without a reason.

Take the time to review the items you typically find yourself understocked on, and work to determine the reason for the sellout. Did the item suddenly sell out due to a certain time of year approaching? Has it become harder to find from other vendors and you became the most popular destination to obtain it from? Did a celebrity or influencer suddenly tell people to go buy this item? Once you understand why the item is selling like it is, you can better schedule a time to reorder it to ensure you still have it on hand when you need it most.

Communication with your suppliers

Lastly, whether you sell items to retail channels, ship directly to consumers, or help with the manufacturing and assembly of needed goods, proper communication with your vendors and suppliers can go a long way to preventing stockouts. Keep open, clear channels of communication with each of them, and be upfront about your needs – if one item keeps selling through, you’re either going to need them to provide more of it in a prompt manner, or you’re just going to have to find someone else that can.


With these tips in mind, hopefully you can reduce the amount of out-of-stock items you encounter.


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