Customer Complaints Stemming from Poor Inventory Control

Tags: | Blog, Demand forecasting, Industry news, Inventory management, Purchasing & replenishment

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Daniel Fritsch   July 18 2016


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This blog is a featured article written by EazyStock’s partner CamCode, a leader in durable bar code solutions for warehouse and inventory management.

Inventory control seems like a relatively straightforward process from the outside looking in. Purchase enough stock to meet customer demand, keep track of how much you sell, and re-order when supply gets low. The reality, of course, is that inventory control is much more complex than this simplistic explanation, and a failure in inventory management can have serious ramifications that are felt throughout the entire business.

In fact, many common customer complaints stem from inadequate inventory control, and it’s not a problem isolated to B2C retailers. Inventory control problems impact the entire supply chain from manufacturers to wholesalers, distributors, drop-shipping suppliers, and B2C retailers – both brick-and-mortar and e-commerce. Here’s a look at a few of the most common customer complaints that can be traced back to inadequate inventory control and how to solve these challenges.

Backorders

Every company runs into the occasional and unexpected high demand. These sudden shifts in demand can be attributed in part to the digital age, when products suddenly gain mass popularity when the right person shares their experience on social media. When customers are in pursuit of the latest trend, backorders are exceedingly frustrating for retailers (who are at the mercy of their wholesalers and distributors) as well as end consumers, and they have a big impact on profitability.

inventory control

If your company is the only company offering a high-demand item, you have a corner in the market. But if your competitors have a better grip on their inventory, backorders in peak demand periods mean lost business as your retail clients or customers turn to the competition for faster service.

Delayed Shipments

In the era of instant gratification when companies like Amazon are setting the gold standard in both the B2C and B2B markets, getting orders to customers’ doors in a timely manner is key for e-commerce vendors. A backorder that’s obvious to a customer at the time an order is placed is one thing, but when delays occur after a customer has the impression that they’re ordering an “in-stock” item, it’s another issue entirely. Unexpected backorders are especially problematic for time-sensitive orders, such as a gift for a birthday or items needed to complete a project by a specific deadline.

Wholesale suppliers, in particular, risk reputation damage if they fail to ship reliably. The wholesale industry is plagued with illegitimate players masquerading as established companies, and their tendency to leave customers empty-handed has given the entire industry a bad rap. Thus, customers seeking wholesalers are often highly critical of performance. If your inventory control methods are leaving your customers with lengthy wait times to meet their customers’ demands, you’ll quickly earn a reputation as an unreliable vendor.

Complicated Return Processes

Effective inventory control doesn’t affect only the purchase process, but also the returns process. Without the right systems in place, restocking items – particularly items that are no longer in peak season or possibly discontinued altogether – can pose challenges for your staff and frustration on the part of your customers.

man making a returnReturns are an even bigger problem when it comes to drop-shipping, where customers are reliant on their drop-shipping supplier to handle the nitty-gritty aspects of order fulfillment to end consumers when their reputation is the one on the line. The entire drop-shipping process adds much more complexity to the inventory control function, when a multitude of moving parts increases the likelihood of errors.

Fulfilling an order too late, for instance, can lead to an increase in returns. If a customer receives a notice that an item is backordered and subsequently finds the same item in stock from another vendor, they’re likely to duplicate the order with a second vendor and cancel or return the initial order. When a clunky return process adds to existing frustrations stemming from slow shipments, drop-shipping suppliers run a serious risk of reputation damage and lost business to their competitors.

Inventory Control Tactics to Overcome Common Customer Complaints

If you’re experiencing any of these common issues, there are several tactics that can help your company regain control over your inventory. A comprehensive approach is best, such as the implementation of a full asset management or inventory control system complete with barcode labels or asset tags and inventory management software.

1. Inventory tracking is key
Your company is already generating an abundance of data, but if you’re not capturing or analyzing your data, you’re not putting it to use to drive your business forward. It all begins with tracking: How many items sell during peak season and off-season? How much inventory did you carry over from last year that is still on the books? How quickly do products move, on average? Implement tracking and management solutions to streamline data capture and use data to your advantage to optimize inventory control.

2. Choose a comprehensive asset management software application
Many inventory management programs integrate with tools such as barcode labels to automate inventory counting and monitoring, which cuts down on the time spent on manual data collection tremendously. If re-ordering has been problematic for you, for instance, look for an application that provides system notifications and alerts (to let you know when inventory levels drop below a pre-defined threshold or when inventory is moving at a pace faster than anticipated) or automated ordering to streamline these processes. Here’s a great list of some top apps.

3. Forecasting offers visibility into future trends
You can gain a substantial competitive edge with accurate forecasting, which can predict future trends that enable you to maintain adequate safety stock and cut down on excess inventory that you’d otherwise store from year-to-year, taking up valuable warehouse square footage. Likewise, you’ll be better equipped to compensate for those unexpected demand shifts thanks to safety stock. And, if you use automated re-ordering, forecasting can reduce time-consuming problems such as unnecessary automatic order placements. When you have an abundance of stock on-hand due to decreased demand, automated orders can quickly fill up your warehouse with slow-moving inventory without better oversight and control.

4. Implement systems offering real-time visibility
One of the primary causes of warehouse inventory errors today is a lack of real-time visibility into stock levels. When software systems and documentation is slow to catch up, it’s all too easy to sell more items than are in-stock, plus re-orders can be delayed by the time someone notices that stock is low. With real-time visibility and alerts, your employees have the advantage of a bird’s-eye view while your technology systems have the most accurate, up-to-date information that prevents such errors from happening.

Inventory control is one of the most challenging aspects for companies at nearly every stage of the supply chain. When customer complaints point back to poor inventory control, many of your inventory challenges can be reduced dramatically by implementing better tools and systems that offer greater visibility, predictive capabilities, and streamlined documentation, ultimately making the entire business run more efficiently.

 

About Camcode:

CamCode LogoFounded in 1979, Camcode® is a recognized worldwide leader in the design and manufacture of durable pre-printed bar code labels and customized services for asset tracking applications utilizing automatic identification and data capture. Users of CAMCODE rely on their solutions for improved inventory control, increased accuracy of financial reporting, easier standards compliance and better predictive maintenance.

Learn more at www.camcode.com