You need to be familiar with these inventory management statistics and the latest trends to make well-informed decisions for your business
Inventory management is a crucial process for all retail businesses. It is essential for you to understand how inventory management works, the various elements involved, and how you can plan your inventory management methods and strategies to make the most out of your stock control. Being aware of the latest statistics and trends can help you make better decisions regarding your inventory management operations. You can find out what the best practices are and start incorporating them into your order fulfillment and stock control strategies. If you are a business looking to outsource their inventory management to a third party logistics company or fulfillment center, being aware of the latest trends can also help you choose the best partner that provides the type of services you need. Inventory management can be a challenging task for most businesses, whether they are small startups or large corporations, From stocking your supplies, tracking your inventory levels, replenishing your stock, to getting accurate inventory forecasts, all of these processes are part of inventory management. To manage your inventory efficiently, you need to understand what the trends in this sector indicate and use this information to avoid any disruptions in your supply chain. Understanding the latest trends and statistics for inventory management can help you manage your business better and work towards becoming more successful. This is why we bring you some of the most important inventory management statistics that you need to be aware of.
Supply Chain And Inventory Management Statistics And Trends
Worldwide cost of inventory distortion (including shrinkage, stockouts, and overstock) is an estimated $1.1 Trillion (IHL, 2015)
It is important to understand that this cost is incredibly high and a lot of inventory has gone to waste over the years. The reasons for such high inventory distortion costs are many, and all of them need to be addressed and solutions have to be found. The inefficiencies in the inventory management process can lead to such a staggering amount of loss. Businesses that are carrying out inventory management need to incorporate the best practices and improve their operations in order to cut these losses. It is crucial that inventory management is made as efficient as possible for every business to prevent so much money from going to waste.
34% of businesses have shipped an order late because they inadvertently sold a product that was not in stock (Peoplevox, 2015)
The pandemic has caused massive damage to supply chains and the order fulfillment processes of businesses over the past few years. Businesses have had to face stockouts and delay orders due to supply chain disruptions. If it takes too long for your stock to get to your storage from dock, it can slow down your order fulfillment. It is important to make sure your inventory management operations are efficient and the dock-to-stock time is less. Sending orders late can have a negative effect on your business and people are less likely to shop from a retailer that cannot deliver their orders on time. Read more about the importance of stock control.
43% of small businesses in the United States don’t track inventory, or do so using a manual system (Waspbarcode, 2022)
Tracking your inventory and stock levels is crucial when it comes to inventory management and order fulfillment. If you are not tracking your inventory, there is a huge chance that you will have to face stockouts, which will cause delays in your order fulfillment process. Tracking inventory manually is a tough job because it can take a lot of time and resources. You will need expert staff that has experience with inventory tracking. Manual inventory tracking is also not as accurate as using a software or technology. It can be difficult to create accurate inventory forecasts if you track inventory manually as there is always a risk of human error.
Reducing stock-outs and overstocks can lower your overall inventory costs by 10% (Zebra, 2017)
It is important for every business to understand how detrimental overstocking or understocking can be to your business and bottom line. If you want to make sure you lower your inventory costs, you need to use the best inventory management practices that can help you save money instead of losing it. You should know how much inventory you need to keep and monitor your stock levels, making sure you are not overstocking. Similarly, if you don’t keep enough stock, you can face stockouts and cause delays in the order fulfillment for your business.
38.8% of U.S. small businesses experienced supply chain delays due to the COVID-19 pandemic (Zippa, 2022)
The pandemic has been rough on all industries, including retail. The lockdowns and restrictions caused countless supply chain disruptions and delays. These delays are detrimental to all businesses. If you cannot get your stock on time, you fail to deliver orders to your customers on time. These delays can bring down the customer satisfaction levels for your online business and result in you losing your customers instead of retaining them. Many businesses have had to deal with stockouts and delays due to the supply chain disruptions brought on by the pandemic.
The global supply chain market is expected to experience a CAGR of 11.2% from 2020 to 2027 (Zippa, 2022)
The market value for the supply chain sector is not going to go down any time soon. Supply chains are crucial to every business, and as businesses keep growing in numbers with each passing year, so will the market value for supply chain. According to reports, the supply chain market value in 2019 was 15.85 billion USD and by 2027, it will be around 37.41billion USD. This means that the supply chain market value will continue to see a massive increase in the coming years.
57% of companies believe that supply chain management gives them a competitive edge (Zippa, 2022)
Companies in today’s day and age realize how important supply chains are. It is crucial that you know the importance of supply chains for your business in order to make the best decisions for your business. Managing supply chains and inventory efficiently can give you a competitive edge and take you a step ahead of your competitors. Efficient management of supply chains and inventories can also lead to better customer service, helping your business increasing the customer satisfaction levels and improving the overall experience customers have with your store.
Reducing supply chain costs from 9% to 4% can double profits (Zippa, 2022)
When it comes to your profit, supply chains can have a massive impact. If your supply chain costs are high, it can reduce your profit margins. It is important to understand that you need to optimize your supply chains and bring the costs down in order to improve your profits. The supply chain costs for industrial suppliers is usually even higher than 9%, which is why if they can manage to bring it down to 7 or 6%, they will immediately double their profits. The businesses that have worked on optimizing their supply chains have already recorded a massive boost in their profits and savings.
Only 22% of companies have a proactive supply chain network (Zippa, 2022)
Having a proactive supply chain network is crucial for you to sustain your profits and make sure your business is successful. If you don’t have a proactive supply chain network, you cannot tell what to expect and you will not be able to predict the latest trends in the industry. Not having a proactive supply chain network means you will not be prepared for a sudden increase in the supply or demand, and you are more vulnerable to stockouts or overstocking. Almost a quarter of businesses operate without a proactive supply chain network, and these businesses had to deal with the most problems during the pandemic and the period of uncertainty in the last few years.
67.4% of supply chain managers use Excel spreadsheets as a management tool (Zippa, 2022)
There are many inventory and supply chain management tools available in today’s day and age. Some might argue that Excel is not one of the most advanced tools for inventory and supply chain management and new technology should be incorporated. It should also be noted that this number only rises with experience as almost 75% of managers that have been working in this sector for a longer time use Excel as their tool of choice for inventory and supply chain management.
The Global Logistics Automation Market has the highest CAGR of any supply chain market, at a predicted rate of 12.4% (Zippa, 2022)
The market size of the global logistics automation sector is growing rapidly. From 50.9 billion USD in 2020, it is now estimated to reach a staggering 82.3 billion USD in 2026. This does not come as a surprise as technology and automation are taking over every industry. The use of technology to automate processes in the logistics sector is becoming more common. Automation helps make the processes more efficient and saves time and resources. It also takes away the need to hire more employees to carry out the tasks related to supply chain and inventory management.
Inventory Visibility And Accuracy Statistics
Supply chain visibility is one of the top strategic priorities for companies around the globe (EY, 2021)
Companies all over the world are now realizing how important it is to maintain visibility regarding their supply chain operations. It is crucial to know every process that takes place, making it easier to check inventory levels and track your supply chain. If you are a business outsourcing your inventory management to another company, it is essential that the company you partner with can provide you with complete insight and visibility into all the supply chain operations.
The most commonly used KPI for supply chain monitoring is daily performance (40%) (Zippa, 2022)
Key performance indicators (KPIs) help you measure your performance is different areas of your business. When you are monitoring your supply chain or inventory management, the most commonly used KPI is daily performance. It is important for businesses to know how they are doing on a daily basis and how close they are to meeting their goals. Checking your daily performance can help you make better decisions on a daily basis.
The average U.S. retail business has an inventory accuracy of only 63% (Cision, 2015)
When you think academically, 63% is a barely passing grade. When it comes to business, 63% is a number that is simply unacceptable. If your accuracy for your inventory is at such a low level, you are more likely to make errors when it comes to restocking and replenishing your inventory. If you cannot create accurate inventory forecasts, there is a higher possibility of facing stockouts. These stockouts can create an underwhelming experience for your customers and you can lose out on potential business when you fail to deliver orders on time due to stockouts and inventory inaccuracy.
By some estimates, item-level tagging, when implemented properly, can increase inventory accuracy from 63% to 95% (Cision, 2015)
There are various technologies and robotics that can be used to improve the accuracy of inventory operations. Using radio frequency identification (RFID) tags on all items in your inventory can help you track all the items better. Through these tags, you can know where your inventory is at all times. Along with RFID tags, using sensors, scanners, and drones can also help reduce the risk of human error and improve the inventory accuracy for your business.
Only 6% of companies report full visibility on their supply chain. 69% of companies do not have total visibility (Zippa, 2022)
It is crucial for every business to have full visibility when it comes to their supply chain. Complete visibility regarding your supply chain and inventory management operations can help you track your inventory better and know where and how your goods are moving. Having visibility for your supply chain can help you track all operations and make better decisions for your business. Only 6% of businesses have full visibility when it comes to their supply chain, which can also explain the high rate of inaccuracies regarding inventory and supply chain.
Inventory Management Software Statistics
The inventory management software market will reach at an estimated value of USD 3.82 billion and grow at a CAGR of 6.12% in the forecast period of 2021 to 2028 (Databridge, 2021)
The inventory management software market continues to grow at a rapid rate. Businesses are realizing how important inventory management software can be. These software solutions help automate many processes related to inventory management and makes all operations much more efficient.
Asia-Pacific dominates the inventory management software market due to rising demand for the RFID technology(Databridge, 2021)
Asia-Pacific has become an ecommerce giant. It is one of the biggest regions when it comes to incorporating mobile devices and RFID technology to enhance their supply chain operations. The need for inventory management software in the Asia-Pacific region is rising because of the growing rate of ecommerce retail markets.
Approximately 72% of all retailers plan to leverage real-time inventory visibility, enabled by automation, sensors, and analytics, to reinvent their supply chains (Zebra, 2017)
We can see from this statistic that businesses and retailers understand the importance of automation and the use of technology to enhance their supply chain and inventory management operations.
Human error is the leading problem in 46% of warehouses (Software path, 2020)
Human errors can be costly, especially in a sector where accuracy is so crucial. Inventory management and supply chain tracking needs to be efficient and accurate to ensure you don’t have to face stockouts or overstocking. Using technology can help you get rid of costly human errors that have an adverse effect on your supply chain and inventory management processes.
Businesses using RFID had a greater 95% inventory accuracy (Software path, 2020)
It is important to note that RFID tagging can help you keep track of all goods in your inventory and improve your overall supply chain and inventory accuracy. With the help of RFID technology, businesses can improve their operations and avoid making any errors.
There are currently 75 software vendors offering inventory management solutions (Software path, 2020)
It is important that you find the best software solution for your inventory management operations. The leading software can help you track your supply chain and inventory better, improve your accuracy, create better forecasts, help you prevent stockouts, and so much more. You can use one of the top inventory management software to improve your processes.
Demand for inventory management software has doubled over the past five years (Software path, 2020)
Businesses are realizing that inventory management software can be extremely helpful for their operations and improve their accuracy rates. The growing need for inventory management software means that companies are trying to use the best technology to improve their inventory and supply chain operations.
Only 18% of small businesses use inventory management software (Software path, 2020)
There are many small business that do not have the resources to get inventory management software to improve their operations. However, it is better for small businesses to invest in inventory management software before they invest in any other areas of their business because inventory and supply chain operations are the most crucial aspect of any business. It is important to improve your inventory accuracy.
Meteor Space Can Streamline Your Inventory Management
Are you looking to outsource your inventory management to a leading company? Then you have come to the right place! Meteor Space is a leading 3PL and fulfillment center, offering some of the top services for inventory management and stock control. We can store inventory for your business in our state-of-the-art warehouse and fulfill orders on your behalf in the most efficient way! We use some of the latest technology and software to manage your inventory, check your stock levels, create accurate inventory forecasts, and replenish your stock on time. With our help, you don’t have to worry about facing stockouts as we guarantee on-time delivery to your customers. Our expert team manages all your inventory operations and our inventory management software helps you track all the processes and orders. We aim to provide you with a 360-degree view into all the inventory and stock management operations we carry out on your behalf, making sure we maintain complete transparency with all our clients. With our help, you will never have to worry about inventory management and you can focus on creating stellar marketing and sales strategies to unlock the full potential of your business. Want to find out more about our leading inventory management and order fulfillment services?Get in touch today!