What is the fastest way to cut stockouts without overbuying?

Tighten your demand forecast for A and X items, set safety stock using service level and lead-time variability, and raise reorder points only where volatility or lead times justify it.

How do I calculate a practical safety stock?

Use a simple service-level approach: safety stock equals Z-score times demand standard deviation during lead time. Start simple, validate against actual service, and tune monthly.

Is ABC/XYZ worth the effort?

Yes. ABC prioritises value, XYZ prioritises predictability. Combine them to set review cadence, counting frequency, and buffer targets where they matter most.

Cycle counting vs full physical count — which should I use?

Cycle counts win for control and continuity. Count high-value and high-risk items more frequently, and reserve a full count for regulatory or year-end requirements.

Which KPIs prove inventory control is improving?

Track inventory accuracy, fill rate, stockout rate, weeks of supply, carrying cost and dead stock. Review weekly with clear owners and exception actions.

How do I expose my true on-hand position in real time?

Integrate WMS, ERP and sales channels to a single view that shows on-hand, on-order, allocated and in-transit. Lock posting rules and timestamps so movements reconcile cleanly.

What causes dead stock and how do I reduce it?

Forecast bias, long minimum order quantities and slow lifecycles. Fix with demand-driven replenishment, MOQ renegotiation, SKU rationalisation and timed markdowns or liquidation.

Do I need separate strategies for retail vs B2B inventory?

Usually yes. Retail needs omnichannel availability and shorter review cycles. B2B needs service-level by account, contract lead times and backorder rules aligned to SLAs.

Inventory Chaos, Tamed: Key Strategies to Actually Control Your Stock

Danyul Gleeson
Oct 27
5 min read

Inventory: the love-hate relationship at the heart of every product business.

Get it right and you’ve got happy customers, smooth cash flow, and a warehouse team that doesn’t mutter curses under their breath. Get it wrong and you’re drowning in unsold seasonal sweaters or explaining stockouts to furious customers.

The truth?

Poor inventory management costs retailers over $1.1 trillion globally every year in lost sales and overstocks (IHL Group). That’s not just leakage - that’s a broken pipe.

The fix?

Smarter inventory control strategies that balance availability, cost, and customer trust.

Here’s how to stop inventory from running your business - and start running it like a pro.

What Is Inventory Control and Why Should You Care?

Inventory control is more than just counting boxes. It’s the science (and sometimes the dark art) of making sure you’ve got the right products, in the right place, at the right time - without choking your cash flow.

Done well, it:

Cuts carrying costs by reducing dead stock.
Prevents stockouts that tank customer loyalty.
Improves cash flow (because cash tied up in unsold goods is just expensive décor).
Keeps customers happy with fast, reliable fulfillment.

👉 Example: A retailer that nails stock forecasting knows not to order 5,000 “ugly holiday jumpers” in March but makes sure the best-selling sneakers never run out.

Eye-level view of warehouse shelves stocked with organized boxes — Organized warehouse shelves with inventory boxes

Strategy 1: Upgrade From Spreadsheets to Smart Systems

Manual tracking is like running logistics with a blindfold. Inventory management software automates the grunt work - real-time stock tracking, automatic reorder points, and integration with sales channels.

Benefits:

Real-time visibility.
Automated reorder alerts.
Forecasting based on actual demand data.
Integration with accounting and sales.

👉 Example: A small e-commerce brand using software like Cin7 or TradeGecko can set reorder triggers that automatically kick in, slashing stockouts and freeing up human hours.

Strategy 2: Just-In-Time (JIT) Without the Just-In-Chaos

JIT inventory sounds like a magic trick - only order what you need, when you need it. Done well, it cuts storage costs and reduces waste. Done badly, one late shipment and you’re toast.

How to make JIT work:

Build strong, reliable supplier relationships.
Improve demand forecasting accuracy.
Streamline processes to handle frequent smaller shipments.

👉 Toyota pioneered JIT in the 1970s. Today, it saves manufacturers 25–30% in inventory carrying costs when applied correctly (Supply Chain Dive).

Strategy 3: Count More Than Once a Year

Yes, software is smart - but physical counts are still your reality check. Regular audits catch theft, damage, or data errors before they snowball.

Tips for effective audits:

Schedule during slower periods.
Use cycle counting (checking a portion of stock regularly).
Train staff properly - counting isn’t as easy as it looks.

👉 Fun fact: Retailers lose 1.4% of sales annually to shrinkage (NRF) - and poor stock checks are a big part of the problem.

Close-up view of employee scanning barcode on inventory box — Employee scanning inventory barcode during audit

Strategy 4: Prioritize With ABC Analysis

Not all stock deserves the same love. ABC analysis helps you rank products by value and turnover:

A Items - high value, low volume (VIP treatment).
B Items - mid-tier (set automated systems to babysit them).
C Items - low value, high volume (keep cheap and cheerful).

👉 Example: An electronics retailer spends 80% of its attention on premium laptops (A), sets reorder automation for phone cases (B), and keeps bulk chargers in giant bins (C).

Strategy 5: Fix the Warehouse, Fix the Flow

An efficient warehouse isn’t just clean - it’s a logistics weapon.

Best practices:

Group similar items.
Label everything clearly.
Put fast-moving products closest to packing stations.
Use barcodes or RFID for precision.

👉 Studies show efficient warehouse layouts can improve picking accuracy by up to 25% and cut fulfillment times by 20% (McKinsey).

What Does Warehouse Management Actually Mean?

It’s the nuts and bolts of moving, storing, and shipping stock. Duties include:

Receiving and inspecting incoming goods.
Accurate storage and inventory counts.
Coordinating order picking, packing, and shipping.
Maintaining safety and cleanliness.

👉 Many businesses use Warehouse Management Systems (WMS) like Manhattan or NetSuite to boost visibility, accuracy, and efficiency.

High angle view of warehouse worker organizing inventory shelves — Warehouse worker organizing inventory shelves

Strategy 6: Let Data Do the Heavy Lifting

Inventory isn’t guesswork - it’s math. By analyzing sales trends, seasonal demand, and supplier performance, businesses can make smarter inventory decisions.

Analytics tools turn raw data into action:

Demand forecasting - predict spikes (holiday sales, promotions).
Lead time analysis - understand supplier reliability.
Inventory turnover ratio - how fast you’re moving stock.
Safety stock calculations - buffers for when demand spikes.

👉 Example: Retailers using predictive analytics saw a 20–30% improvement in forecast accuracy, leading to fewer stockouts and overstocks (Gartner).

Strategy 7: Commit to Continuous Improvement

Inventory control isn’t a “set it and forget it” process. It’s ongoing, and the businesses who thrive are the ones constantly tweaking.

Best practices:

Train employees well.
Set and track clear KPIs (order accuracy, carrying cost, stockouts).
Collaborate with suppliers on demand forecasts.
Upgrade tech regularly.
Review policies quarterly, not once in a blue moon.

👉 Companies that make inventory reviews part of quarterly ops meetings reduce inventory costs by 8–15% year over year (PwC).

Wrapping It Up: From Chaos to Control

Inventory will always be tricky - but it doesn’t have to be a constant dumpster fire. With the right systems, smarter forecasting, better layouts, and continuous improvements, businesses can:

Slash carrying costs.
Keep customers happy with reliable stock.
Free up cash for growth instead of dead inventory.
Build a reputation for reliability, not excuses.

The bottom line: Control your inventory, or it’ll control you.

FAQs: Inventory Chaos, Tamed: Key Strategies to Actually Control Your Stock

Why is inventory control so important for business success?

Because bad inventory isn’t just messy - it’s expensive. Global retailers lose over $1.1 trillion annually to poor inventory management in the form of overstocks, out-of-stocks, and lost sales (IHL Group). Strong inventory control frees up cash flow, reduces waste, and keeps customers happy with reliable order fulfillment.

How can inventory management software improve stock accuracy?

Software takes the guesswork out of stock control. Real-time updates, automated reorder points, and integrated analytics reduce errors that plague manual systems. Companies using automated inventory tools report up to 30% fewer stockouts and 25% lower carrying costs compared to manual methods (Gartner).

What are the benefits of Just-In-Time (JIT) inventory?

JIT reduces storage costs and minimizes waste by receiving goods only when needed. When paired with reliable suppliers and accurate demand forecasting, JIT can cut inventory carrying costs by 25–30% (Supply Chain Dive). But without strong processes, one supplier delay can create chaos.

How does warehouse layout impact inventory control?

A badly designed warehouse is a bottleneck. Studies show optimized layouts improve picking accuracy by 25% and reduce fulfillment times by 20% (McKinsey). Clear labeling, grouping items logically, and putting fast movers near packing stations are simple changes that deliver major efficiency gains.

What role does data analytics play in inventory optimization?

Analytics turns raw numbers into strategy. By tracking sales patterns, lead times, and turnover ratios, businesses can forecast demand more accurately and set smarter safety stock levels. Retailers using predictive analytics improve forecast accuracy by 20–30%, slashing stockouts and overstocks (Gartner).

Got Questions about Inventory Control? Let's Chat!

Insights from Danyul Gleeson, Founder & Logistics Chaos Tamer-in-Chief at Transport Works

Danyul has been in the trenches - warehouses where pick paths were sketched on pizza boxes and boardrooms where the “supply chain strategy” was a shrug. He built Transport Works to flip that script: a 4PL that turns broken systems into competitive advantage. His mission? Always Delivering - without the chaos.