According to a study by the National Retail Federation (NRF), inventory inaccuracies can result in an average of 8.7% loss in sales for retailers, with 43% of those losses attributed to out-of-stock situations. Most enterprises are still using legacy inventory management systems which cause some serious inventory mistakes. Inefficient inventory management is a sad reality.
5 Critical Errors Caused by Legacy Inventory Systems
1. Data Inaccuracy
Legacy systems do not have real-time data integration capabilities as they rely on manual data entry. Delays and human errors in data entry led to data inaccuracies. Due to the inaccuracies, inventory managers often face challenges like stockouts and overstock situations. These challenges disrupt operations and result in financial losses. The NRF survey reported that data inaccuracies in inventory management caused an average stockout rate of 8% and an overstock rate of 10%.
2. Inefficient Reordering
Demand forecasting is challenging using legacy systems. These systems do not have replenishment algorithms that help you follow efficient reordering practices. Furthermore, this can lead to stockouts or overstocks, negatively impacting customer satisfaction and tying up capital in excess inventory or lost sales opportunities.
3. Inadequate Reporting and Analysis
Legacy systems have limited or outdated reporting capabilities. So, it is difficult to generate accurate and timely inventory reports for decision-making. You cannot get comprehensive visibility into inventory levels, turnover rates, and other key metrics, hindering effective inventory management strategies.
4. Lack of Integration
Legacy systems do not integrate well with other modern systems, such as e-commerce platforms, transportation management systems, or warehouse management systems. As a result, your data is siloed. You rely on manual data transfer and inefficient communication, leading to errors and delays in inventory management processes.
5. Security Risks
Legacy systems lack modern security features, making them vulnerable to cybersecurity threats, data breaches, and other security risks. This can compromise the integrity and confidentiality of inventory data, leading to potential errors, discrepancies, and losses. According to a report by Ponemon Institute, 80% of IT professionals surveyed believed that legacy systems are more vulnerable to cyberattacks compared to modern systems.
Mobile Solution for Your Legacy Inventory Management
Utilize a mobile inventory management solution that connects your warehouse personnel to back-end systems in real time, such as Oracle SCM Cloud. Connecting your frontline employees to the cloud eliminates work redundancy, manual chores, human errors, and inaccuracies in your inventory operations. Also, you can track the movement of your products in real time and make informed decisions.
Consider providing frontline workers with cloud access using Propel Apps’ Mobile Supply Chain for controlled access to the cloud. This solution allows you to control who can access which modules and perform specific operations.
Using Propel Apps’ best-in-class mobile inventory management solution, you can achieve:
- 100% data accuracy with data validations
- Reduced operating costs by 40% with the serverless architecture of the solution
- Reduced IT support costs
- Uninterrupted supply chain operations