Inventory Shrinkage: Strategies for Prevention with Mobile Warehouse Management

Inventory shrinkage is a common problem prevalent in most of the warehouses and if not addressed timely may lead to significant loss and even spoils the brand of an organization. Inventory shrinkage refers to the loss of inventory that cannot be accounted for between the point of purchase and sale. Inventory shrinkage not only effects an organization’s bottom line but also impacts the operational efficiency and customer satisfaction.

However, things are not that gloomy and discouraging; there are ways to address this recurring issue using a mobile warehouse management solution (WMS). In this blog, we delve into the role of mobile WMS in combating inventory shrinkage and explore how it can play a major role in shrinkage prevention strategies.

Inventory Shrinkage

Challenges in Warehouses Regarding Inventory Shrinkage

Warehouses face numerous challenges when it comes to inventory shrinkage. Some of the key issues include:

1. Manual Processes

Traditional inventory management systems mostly rely on manual, paper-based processes that are prone to errors. This means a warehouse clerk can make a wrong entry in the book of records or even miss an entry leading to data inconsistencies in inventory records. This may prove costly to an organization, particularly during inventory reconciliation or while performing periodical audits.

2. Lack of Real-time Visibility

Lack of a suitable inventory management system such as Oracle or SAP ERP, combined with a manual, paper-based process, hinders the timely input and organization of data. Consequently, there is limited visibility into inventory management and stock levels, making it challenging to promptly identify shrinkage.

3. Employee Theft

Most warehouses encounter a significant issue regarding employee behavior. It is widespread for a few workers to engage in either intentional or unintentional inventory theft, resulting in a noticeable decrease in inventory. The absence of a reliable tracking system makes it challenging to identify the culprits responsible for the theft, exacerbating the problem.

4. Supply Chain Complexity

With complex supply chain eco-systems, it becomes increasingly complex to track the movement of inventory from source to destination and even across multiple locations and touch points. With inventory tracking becoming a major challenge, properly identifying inventory shrinkage becomes even more complex and difficult.

These challenges highlight the need for a good ERP solution to mitigate inventory shrinkage effectively. Though a centralized ERP system like Oracle or SAP can help in addressing these challenges to a certain extent, however, it is the mobile WMS that is the winner all the way in fostering good warehouse management practices. Since, most of the warehouses are located at far flung places that have limited internet connectivity, accessing the crucial ERP data becomes a major challenge for such personnel.

A mobile WMS that seamlessly connects with an organization’s centralized ERP database can successfully bridge this gap, letting its front-line executives and back-office personnel easily process a plethora of warehouse transactions, anytime, anywhere.

Let’s have a brief overview of how a mobile WMS solution can address the inventory shrinkage challenges.

Role of Mobile Warehouse Management Solution in Addressing Inventory Shrinkage

Mobile WMS offer a range of features and capabilities that directly address the challenges associated with inventory shrinkage:

Real-time Tracking

A mobile WMS enables real-time tracking of inventory movements using barcode scanning and RFID technology. With seamless capture of data, there is little chance of data discrepancies, ensuring maintenance of up to data inventory records. When inventory data is accurate, the chance of shrinkage due to data errors is almost zero.

Streamlined Processes

With rapid inventory automation, mobile WMS reduce human error, enabling streamlined operations. This way, the efficiency of the warehouse operations increases manifold, leading to 100% inventory accuracy and reduced shrinkage.

Enhanced Visibility

With advanced features like barcode scanning, GPS and IoT, a mobile WMS can exactly track the movement of assets across different touch points, enabling various stakeholders to get a comprehensive visibility into inventory levels and locations. This visibility enables quick detection of discrepancies and timely intervention to prevent shrinkage.

Unmatched Security

With in-built security features such as user authentication and access controls, the data that is tracked and disseminated using a mobile WMS will always be secure. This poses a minimal threat to internal theft and unauthorized access to inventory.

Analytics and Reporting

A good mobile WMS that integrates with a centralized ERP system offers advanced analytics and reporting capabilities that identify and decipher patterns and trends related to shrinkage. This way, warehouse personnel can easily take proactive measures to address any underlying issues.


One of the good features of a mobile WMS is scalability. This way, the solution becomes adaptable for warehouses of all sizes and provides capability to address the most complex supply chain challenges. Most of the mobile warehouse solutions that are available in the market provide good scalability features, tending to be the preferred choice among the warehouse personnel.

By leveraging these features available in a good mobile WMS solution, warehouses can significantly reduce the occurrence of inventory shrinkage and optimize their operations for greater efficiency and profitability.

In the above context, you can explore Propel Apps’ mobile WMS solution that streamlines complex warehouse and supply chain processes for Oracle EBS, Oracle Cloud, and SAP S/4 HANA while efficiently capturing and maintaining your barcode data. And the best part is this solution even works in warehouses where there is poor internet connectivity, so your warehouse personnel can always process those crucial warehouse transactions anytime.

What’s more? This solution is easily customizable as per your unique business requirements, while ensuring that your ERP data is always safe and secure. To know more about our solution and how it works, please schedule a call with us today.

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