Inventory control is a crucial aspect of any business that deals with physical products. Effective inventory management can help businesses reduce costs, improve efficiency, and enhance customer satisfaction.
Here are inventory control statistics that highlight the importance of inventory management and the impact it can have on businesses.
Key Inventory Control Statistics 2023 – MY Choice
- In 2020, the global inventory management software market was valued at $3.5 billion.
- Small businesses lose up to $25,000 per year due to poor inventory management.
- The cost of carrying excess inventory can be up to 30% of its value.
- On average, businesses with inventory lose about 4% of their inventory to theft.
- The average out-of-stock rate for retailers is 8%.
- Using barcodes and scanners can reduce inventory errors by up to 65%.
- In a survey, 43% of small businesses stated that inventory management was their biggest challenge.
- Nearly 70% of businesses with inventory use manual methods to track it.
- The accuracy of physical inventory counts is about 65%.
- On average, companies with effective inventory management have a 97% inventory accuracy rate.
Inventory Control Stats
Table 1: Inventory Control Usage Statistics
| Statistics | Figures |
|---|---|
| Productivity Increase | 25% |
| Space Usage Gain | 20% |
| Stock Use Efficiency Improvement | 30% |
| Organizations not using AI | 46% |
| Organizations with limited AI usage | 50.1% |
Table 3: Inventory Control Software Statistics
| Statistics | Figures |
|---|---|
| Reduction in inventory mistakes and overstocking with dedicated restaurant inventory management software | 17% |
| Average spending for employees for SCM software in 2025 | $8.08 |
1. Inventory Shrinkage Costs Businesses Billions
According to the National Retail Federation, inventory shrinkage cost U.S. retailers $61.7 billion in 2019. This was up from $50.6 billion in 2018, indicating a growing problem for businesses that do not effectively control their inventory.
2. Small Retailers Lose More to Inventory Shrinkage
Small retailers, defined as those with annual revenues under $50 million, lose a higher percentage of their inventory to shrinkage than larger retailers. In fact, the National Retail Federation reports that small retailers lost 2.3% of their inventory to shrinkage in 2019, compared to 1.3% for larger retailers.
3. 46% of Small Businesses Don’t Track Inventory
A survey by Wasp Barcode Technologies found that 46% of small businesses in the U.S. do not track their inventory or use a manual method such as pen and paper. This can lead to inventory shortages, stockouts, and lost revenue.
4. Inventory Accuracy Rates Affect Customer Satisfaction
A study by Zebra Technologies found that 84% of consumers would not return to a retailer if they received an incorrect or late order. This underscores the importance of accurate inventory control for customer satisfaction and retention.
| Statistics | Figures |
|---|---|
| US GDP invested in inventory management technology in 2016 compared to 2017 | About 7% |
| Supply chain management professionals wanting to improve inventory management practices | 75% |
| Supply chain management and transportation executives needing to reevaluate warehouse locations | 48% |
| Small businesses tracking inventory with pen and paper | 24% |
| Warehouses planning to use mobile devices to speed up inventory management | 67% |
| Retailers investing in new systems | 25% more |
| Top issue in warehouses today | Human error (46%) |
| Small businesses not tracking inventory at all | 7% |
| Percentage of a company’s purchasing budget spent on MRO items such as janitorial supplies and maintenance tools | Roughly 40% |
| Businesses spending on average on inventory costs | 25% to 35% of their budget |
| Carrying costs accounting for | About 25% of a given company’s total inventory costs |
| MRO inventory typically turning over less than once per year resulting in recurring costs including | About 5% of its total value in insurance costs |
| Percentage of stock sold at full price by non-grocery retailers | 60% |
| Lost revenue due to markdowns in the US | About $300 billion |
| Retailers knowing specific ways advanced analytics could help cut inventory management costs | 86% |
| Inventory that never gets used | About 10% |
| Percentage of US restaurants struggling to turn a profit due to their inability to manage food costs and keep them at acceptable levels | 75% |
| Restaurant inventory shrinkage in the US due to employee theft | 75% |
| Estimated cost of pilferage for restaurants per year | $20 billion |
| Essential menu items that account for nearly 50% of sales in an average restaurant | 10 to 15 |
| Percentage of restaurant sales coming from only 16% of menu items | 80% |
| Percentage of food wasted before it makes it onto a plate in an average restaurant | 10% |
| Diners conscious of restaurant waste practices | 72% |
| Diners willing to pay more to support restaurants that actively endeavor to reduce food waste | 47% |
Inventory Control Methods
Table 2: Inventory Control Market Statistics
| Statistics | Figures |
|---|---|
| Supply chain spending increased by | 25% for cutting costs, 25% for SCM automation, and 23.7% for market expansion |
| CAGR of the global supply chain management market | 11.2% from 2020 to 2027 |
| Predicted market share of transportation management systems | $4.8 billion by the end of 2025 |
| Companies using machine learning to boost forecast accuracy | 19% |
| Organizations with no tech systems for monitoring supply chain performance | 63% |
| Leading supply chain market constraints | Containing cost increases (32%), facing global competition (28%), and adapting to customer expectations (27%) |
1. ABC Analysis
ABC analysis is a method of inventory control that categorizes inventory items based on their value and usage rate. The most valuable items with the highest usage rates are classified as “A” items, while less valuable items with lower usage rates are classified as “C” items. This method can help businesses focus on managing the most important inventory items.
2. Just-in-Time (JIT) Inventory
Just-in-time inventory is a method of inventory control that involves ordering and receiving inventory just in time for production or sale. This can help reduce inventory carrying costs and improve cash flow, but it requires careful planning and a reliable supply chain.
3. Economic Order Quantity (EOQ)
Economic order quantity is a method of inventory control that calculates the optimal order quantity based on factors such as demand, lead time, and ordering costs. This method can help businesses order the right amount of inventory to balance costs and avoid excess inventory.
1. The Basics of Inventory Control
- The average small business has $20,000 worth of inventory on hand at any given time. (Wasp Barcode Technologies)
- Inventory is the largest asset for 50% of small businesses. (Wasp Barcode Technologies)
- 43% of small businesses conduct manual inventory tracking. (Wasp Barcode Technologies)
- 46% of small businesses still do not track inventory or use a manual process. (Wasp Barcode Technologies)
- Nearly half of all small businesses in the US have experienced inventory stockouts in the last year. (Wasp Barcode Technologies)
2. Inventory Accuracy and Counting
- Manual inventory counts have an average accuracy rate of 63%. (Wasp Barcode Technologies)
- 60% of businesses that don’t use an automated inventory system have inaccurate inventory counts. (Wasp Barcode Technologies)
- RFID inventory systems have an accuracy rate of up to 99%. (Wasp Barcode Technologies)
- Cycle counting can improve inventory accuracy to over 99%. (Fishbowl Inventory)
- The cost of manual data entry errors in inventory management can be as high as $60 per error. (Wasp Barcode Technologies)
3. Inventory Costs and Losses
- The average cost of carrying inventory is 25% of its value per year. (Entrepreneur)
- Excess inventory costs US retailers $471.9 billion annually. (IHL Group)
- Inaccurate inventory tracking costs retailers $1.75 trillion globally each year. (Zebra Technologies)
- Inventory shrinkage costs US retailers $46.8 billion annually. (National Retail Federation)
- The average shrinkage rate in retail is 1.4%. (National Retail Federation)
4. Inventory Management and Technology
- The global inventory management software market is expected to reach $4.4 billion by 2027. (Grand View Research)
- The adoption of cloud-based inventory management software is expected to grow by 19% annually. (Technavio)
- RFID technology is expected to have a market size of $40.5 billion by 2025. (Grand View Research)
- 62% of small businesses that implement an automated inventory system see a return on investment within six months. (Wasp Barcode Technologies)
- 79% of small businesses that implement an automated inventory system see a reduction in carrying costs. (Wasp Barcode Technologies)
5. Forecasting and Planning
- 79% of businesses say that forecasting and planning are the most important aspects of inventory management. (Fishbowl Inventory)
- Accurate demand forecasting can reduce excess inventory by 30%. (Supply Chain Game Changer)
- 46% of retailers say that they have insufficient data to make accurate demand forecasts. (Inbound Logistics)
- Demand forecasting can reduce stockouts by up to 50%. (Supply Chain Game Changer)
Importance of Inventory Control
Table 1: Inventory Control Stats
| Data | Percentage/Value |
|---|---|
| Small businesses not tracking inventory | 43% |
| Average growth rate for all occupations | 8% |
| Companies that believe supply chain management gives a competitive edge | 57% |
| Industry professionals prioritizing supply chain management | 70% |
| KPIs used for supply chain monitoring | See text |
| Pre-pandemic supply chain disruptors and their causes | See text |
| Transportation and logistics activities as a percentage of global GDP | 12% |
| Percentage of supply chain companies utilizing 4 or 5 transportation methods | 74% |
| Percentage of freight invoice payments minimized using transportation management system | 90-95% |
| Saving on freight costs from using transportation management tools | 8% |
| Executives’ plans to enhance resilience in transportation and logistics in 2020 | See text |
| Most important inventory management practices | See text |
| Value of out-of-stock items | $1.14 trillion |
| Value of global inventory distortion in 2020 among mass merchants and grocery retailers | $176.7 billion (overstock) and $568.7 billion (out-of-stock) |
Table 2: Inventory Management Strategies to Take Post COVID 19
| Strategy | Percentage |
|---|---|
| Plan to dual source raw materials | 53% |
| Plan to increase the inventory of critical products | 47% |
| Plan to nearshore and expand supplier base | 40% |
| Plan to regionalize the supply chain | 38% |
| Plan to reduce the number of SKUs in product portfolios | 30% |
| Plan to have higher inventory along the supply chain | 27% |
| Plan to backup production sites | 27% |
| Plan to nearshore their own productions | 15% |
| Plan to increase the number of their distribution centers | 15% |
1. Improves Cash Flow
One of the primary benefits of inventory control is improved cash flow. By keeping track of your inventory levels and ordering only what you need, you can reduce excess inventory and free up cash that would have been tied up in inventory. This can improve your financial position and help you invest in other areas of your business.
2. Increases Efficiency
Effective inventory control can increase the efficiency of your business operations. By having the right amount of inventory on hand, you can avoid stockouts and reduce the time and resources needed to manage inventory. This can help your business run smoothly and focus on other important tasks.
3. Enhances Customer Service
Inventory control can also enhance your customer service by ensuring that you have the products your customers want in stock and ready to ship. This can improve order fulfillment times and increase customer satisfaction.
