What are the most important problems encountered in inventory management?

1 - Failure to follow the limits of the request and the security limit and the maximum at the time of purchase, which leads to the occurrence.

2 - not follow the correct rules in the exchange out of stock.

3. Failure to secure the stock properly against risks (fire, theft, destructive natural factors, etc.)

4. Lack of specific inventory control systems.

5 - not to follow the correct steps to behave in the idle inventory and the separation of marketing management from the tasks of follow-up classes and slow draw.

6 - the lack of organization of the store and its division by categories and the presence of congestion and points of suffocation.

The problems in the traditional inventory system: With out-of-stocks representing both a significant cost and a reputational concern, inventory management continues to be a thorn in the side of Consumer Packaged Goods (CPG) companies.

The reason? Traditional inventory systems have always focused on improving forecasting, while the forecast is only a small part of the overall inventory management problem.

Most of the issues occur at the retail store shelf, which aren’t included in forecasts.

A new paradigm is needed – one which brings all factors into play, and which enables a proactive approach to solving inventory problems before they occur.

Traditional Inventory Management Traditional inventory systems attempt to solve the inventory management dilemma through better forecasting, improvements in the order point / order quantity process, or by adjusting safety stock levels.

However, order quantities, safety stock and lead time represent only a minority of the sources of inventory problems.

Many inventory problems are the result of poor execution, poor communication, and / or poor decision making.

Poor execution is common at all levels of the supply chain and starts at the store level. For example:

• Product makes it to the store but doesn’t make it to the shelf.
• Promotional displays or inventory make it to the store but not to the floor.
• Product is put on the wrong truck at a distribution center, sent to the wrong store, or is late to a distribution center.

Poor communication is common both within and across supply chain functions, and takes a particular toll in data analysis and collaboration. Analysts, category managers, sales managers and supply chain personnel look at problems in different ways and focus on different aspects of them. Getting insights from data is often a complex process for CPG data analysts, making collaboration difficult.

Poor decision-making is endemic at all levels of the supply chain, and is often the result of both poor execution and poor communication. Quite often poor decisions are made because the decision maker doesn’t know where to focus. There are so many different SKUs in so many different stores, from so many different distribution centers, in so many different locations in the stores, under so many different conditions. Consequently, shortcuts are almost always taken, which may compound the problem or lead to new ones.

Poor execution, communication and decision making, coupled with “advanced” inventory management systems leads to a vicious cycle, ultimately reducing sales, profit margins and customer loyalty.

A Virtuous Cycle in Inventory Management Above, some of the issues with traditional inventory management. In particular, that poor execution, communication and decision-making in inventory management contribute to a vicious cycle of declining sales, margins and customer loyalty.

To address this vicious cycle, the CPG supply chain needs a system to identify and correct problems before they occur. This requires monitoring of many different genres of information – POS, shipments, orders, forecasts, forecast errors, on-hand inventory, inventory position, number of stores selling, etc. – and separating the signal from the noise to identify deviations from expected levels.

Conclusion By implementing the PINPOINT-PRIORITIZE-PREVENT paradigm in inventory management, CPG companies can better orchestrate their supply chain by optimizing execution, communication, and decision-making processes – using consumer demand as the key driver.

When inventory is driven by actual demand, in addition to forecast, the supply chain operates at greater efficiency and at increased profit margins.

CPG companies that fail to take an agile approach to inventory management may continue to struggle with on-shelf availability, and may find that consumers (and retailers) look elsewhere for the products they want.

Thanks for invitation, 

The most important problem in inventory management is to accurately determine  "The point of repurchasing", as a vital element in well investing the institution's resources 

I agree with all above answer given by experts, Here I would like to add some more points.1. Failure to follow SOP strictly,2. Failure to follow up till solve,3. Failure to correct information,4. Failure to proper reporting. 5. Failure to manage space utilize according to broadcast.etc... 

1.The cost of maintaining the stock

2 Maintaininng the restocking level

3.maintaining quality stock always

4 avoiding obsolete stocks

Thanks

I will go the points which given by my colleague Mohammed

Would love to gain more knowledge by following experts answers.