Today, we’re going to explore some of the most valuable Inventory Management statistics for 2023.
Let’s get started.
Key Inventory Management Statistics 2023 – MY Choice
- Inventory, accounts receivable, and accounts payable account to $1.1 trillion in assets. That’s about 7% of the US GDP.
- Warehouse space in the United States costs about $5.08 per square foot.
- American retailers carry about $1.43 in inventory for every $1 of sales.
- A top ten reason for startups to fall is that they do not manage their inventory.
- 75% of all supply chain management professionals want to improve their inventory management practices.
- 48% supply chain management and transportation executives state that they need to reevaluate their warehouses locations.
- 24% of small businesses track their inventory with a pen and paper.
- As a result of these and other statistics, many retailers and manufacturers are investing in better inventory management solutions.
- 67% of warehouses plan to use mobile devices to speed up their inventory management.
- Warehouse management solutions are a must today. 25% more retailers are investing in new systems.
- he top issue in 46% of warehouses today is human error.
- 7% of small businesses don’t track inventory at all!
Table 1: Statistics on the Amount of Capital Tied Up in Inventory
|Amount of cash tied up in inventory, accounts receivable, and accounts payable as a percentage of the U.S. GDP||7%|
|Amount of capital tied up in inventory in the U.S.||$1.1 trillion|
|Inventory as a percentage of sales in the U.S. retail industry||$1.43 in inventory for every $1 of sales|
|“Days inventory outstanding” growth rate over the past five years||8.3%|
Table 2: Statistics on Inventory Management Practices
|Percentage of small and medium-sized businesses (SMBs) without a robust inventory management system in place||46%|
|Percentage of warehouses planning to expand the number of inventory SKUs carried over the next five years||54%|
|Percentage of warehouses planning to use mobile devices to manage inventory||67%|
Table 3: Statistics on Warehouse and Inventory Management Trends
|Average cost per square foot of warehouse and distribution centers in the U.S.||$5.08|
|Growth rate of the number of warehouses in the U.S. over the last five years||6.8%|
|Percentage of Target’s online purchases marked for pick up in-store||15%|
Table 4: Statistics on the Benefits of Inventory Management
|Reduction in medication administration errors with barcode inventory tracking||41.4%|
Inventory Management General Stats
|Worldwide cost of inventory distortion (including shrinkage, stockouts, and overstock)||$1.1 Trillion (IHL, 2015)|
|Percentage of businesses that have shipped an order late because they inadvertently sold a product that was not in stock||34% (Peoplevox, 2015)|
|Percentage of small businesses in the United States that don’t track inventory, or do so using a manual system||43% (Waspbarcode, 2022)|
|Percentage reduction in overall inventory costs by reducing stock-outs and overstocks||10% (Zebra, 2017)|
|Percentage of U.S. small businesses that experienced supply chain delays due to the COVID-19 pandemic||38.8% (Zippa, 2022)|
|Expected CAGR of global supply chain market from 2020 to 2027||11.2% (Zippa, 2022)|
- Inventory, along with accounts receivable and accounts payable, have tied up $1.1 trillion in cash.
- Currently, US-based retailers sit on approximately $1.43 in inventory for each $1 of sales they make.
- Only 43% of small businesses track and manage their inventory.
- The amount of inventory on hand based on average daily sales has increased by 8.3% over the previous five years.
Warehouse Management Statistics 2023
- Up to 73% of warehouses plan on using a mobile device for inventory management purposes.
- The number of warehouses in the United States has increased by 6.8% in the past five years.
- A square foot of warehouse and distribution centers in the United States costs about $5.08.
- Approximately 42% of warehouses and distribution centers are expected to invest in technology and automation.
Table 1: Warehouse Management Usage Statistics
|Inventory Accuracy||Measures the accuracy of inventory in the warehouse|
|Labor Utilization||Measures the amount of labor used to complete tasks within the warehouse|
|Order Accuracy||Measures the accuracy of orders fulfilled by the warehouse|
|Order Cycle Time||Measures the time taken to complete a single order|
|Order Fulfillment Rate||Measures the percentage of orders that are fulfilled correctly and on time|
|Integrated Order Processing Benefits||Using integrated order processing for inventory system can boost productivity by 25%, space consumption by 20%, and stock use efficiency by 30% for businesses|
Table 2: Warehouse Management Market Statistics
|Market Value (2019)||$4.16 billion|
|Market Value (2027)||$7.90 billion|
|Warehouse Management System (WMS) Adoption||90%|
|Machine Learning Increase in Forecast Accuracy||19% of companies implementing SCM projects|
|Transportation Management Systems Predicted Value||$4.8 billion by the end of 2025|
|Logistics Management Report||WMS is used in 85% of warehouse operations|
|Supply Chain Investment Reasons (2018)||Cost reduction (25%), SCM automation (25%), market expansion (23.7%)|
|Predicted CAGR (2020-2027)||11.2%|
|Businesses with Tech Solutions to Monitor SCM||63%|
|Main Supply Chain Market Constraints||Limiting cost increase (32%), fending off international competition (28%), fulfilling customer expectations (27%)|
Table 3: Warehouse Management Software Statistics
|Leaders Utilize||Optimization software 75% of the time, visualization software 67% of the time, mobile technologies 75% of the time, and RFID tags 65% of the time|
|Average Cost of SCM Software (2025)||$8.08 per person monthly|
Table 4: Warehouse Management Adoption Statistics
|Warehouse Management System (WMS) Adoption||90%|
|Reduction in Paper-Based Picking Systems (2018)||62% to 48%|
Table 5: Warehouse Management Latest Statistics
|Increase in Spending on Omni-Channel Fulfillment (2021)||58.6% of retail supply chain executives plan to increase their spending on omni-channel fulfillment.|
|Characteristic Response Share (2021)||83%|
|Gender Pay Gap (2021)||Women made 97% of what men did.|
|Use of Excel Spreadsheets (2021)||46% of supply chain experts still utilize Excel spreadsheets for their business operations. if we were in 2021 or 1995.|
|Predicted CAGR (2020-2027)||11.2%|
- US-based retailers are trying to increase in-store pickups and lower the burden of inventory from warehouses (i.e. 15% of Target’s online purchases are marked for in-store pickup).
- Around 54% of warehouses are planning to expand the number of inventory stock-keeping units over the upcoming five years.
- Human error was reduced by 43.5% percent by using barcode technology on medication at an academic medical center.
What is a warehouse management system (WMS)?
A warehouse management system (WMS) is a software application used to improve warehouse operations, enhance the process of order fulfillment, reduce operational costs, and improve customer service.
It is a crucial component of inventory management as it helps in managing resources efficiently by monitoring the movement of goods in and out of the warehouse, tracking inventory levels, and allocating inventory to various orders.
WMS streamlines the inventory management process, reduces operational costs, and improves customer service. The software is typically cloud-based and can integrate with other systems such as accounting and supply chain management.
What are the benefits of using a WMS?
Using a WMS can benefit businesses in various ways, including:
- Boosting productivity by up to 25%
- Reducing space consumption by up to 20%
- Improving stock use efficiency by up to 30%
- Enhancing the process of order fulfillment
- Reducing operational costs
- Improving customer service
- Optimizing the labor force
- Tracking shipments
- Automating warehouse operations
- Increasing accuracy
- Improving warehouse throughput
- Providing real-time visibility into inventory levels
What is the warehouse management market?
The warehouse management market refers to the market for software applications used to enhance warehouse operations.
The market is segmented based on component, warehouse type, deployment, industry vertical, and region. Furthermore, the market is divided into solutions and services based on components. The services segment is further classified into professional services and managed services.
The market was valued at $4.16 billion in 2019 and is anticipated to rise to $7.90 billion by 2027, at a CAGR of 9.2%.
The key factors driving the growth of the global warehouse management market are the growing demand for efficient inventory management, the increasing need for warehouse optimization, and the rising demand for efficient warehouse operations.
What are the latest statistics on warehouse management?
Some of the latest statistics on warehouse management are:
- In 2021, 58.6% of retail supply chain executives plan to increase their spending on omni channel fulfillment.
- Women made 97% of what men did in 2021.
- 46% of supply chain experts still utilize Excel spreadsheets for their business operations.
- A CAGR of 11.2% is predicted for the worldwide supply chain management industry from 2020 to 2027.
- WMS adoption topped 90% in 2018 for the first time.
- The market for warehouse management was valued at $4.16 billion in 2019 and is anticipated to rise to $7.90 billion by 2027, at a CAGR of 9.2%.
Supply chain technology trends
Table 1: Supply Chain Technology Trends
|Adoption of Intelligent Algorithms for Inventory Forecasting||90% accuracy achieved with a three-month lag compared to manual forecasting||McKinsey & Co|
|Lack of Technology Usage for Supply Chain Performance Monitoring||63% of businesses do not use technology to monitor supply chain performance||Inbound Logistics|
|Increased Investment in Supply Chain||40% of businesses plan to increase their supply chain investment with the primary goal of increasing speed, agility, and resilience||Bain & Co|
|Supply Chain Network Optimization||90% of businesses plan to change their supply chain network to optimize their supply chain||Bain & Co|
|AI-Enabled Supply Chain Management||Logistics costs improved by 15%, inventory levels by 35%, and service levels by 65% compared to slower-moving competitors||McKinsey & Co|
|Upskilling Workforce on Digital Technologies||61% of executives are committed to training and upskilling their workforce on using new digital technologies||E&Y|
|Investment in AI and IoT||70% of retail and manufacturing businesses have started a digital transformation project in their supply chain operations||Business Insider|
|Manufacturing Supply Chain Investment in Resiliency and AI||Manufacturing supply chains will invest in supply chain resiliency and AI, resulting in productivity improvements of 15% by December 2021||IDC Manufacturing Insights|
|AI and Cognitive Computing in Production Planning||92% of manufacturing executives believe that AI and cognitive computing would enhance performance in production planning||IBM|
|Growth of IoMT Industry||The IoMT is predicted to reach a $160 billion market size by 2022, and there are 500,000 medical technologies on the market designed to improve quality of life||ROI, Deloitte|
|Smart Railway Systems||As the railway system grows, there is a growing focus on smart railway systems to help connect urban cities and reduce carbon emissions, with passenger mobility predicted to increase by 200-300% and freight activity by 150-250% by 2050||Mordor Intelligence|
Why is finding an alternative solution to Excel spreadsheets important for supply chain management?
Finding an alternative solution to Excel spreadsheets will give you intelligent algorithms to produce accurate inventory forecasts. This is important because manual forecasting can lead to only 60% accuracy, whereas machine learning can achieve up to 90% accuracy with a three-month lag. [McKinsey & Co]
How does investing in technology impact supply chain performance?
Senior management now regards supply chains as an integral part of adding greater shareholder value. By investing in technology, businesses can increase speed, agility, and resilience, resulting in improved logistics costs by 15%, inventory levels by 35%, and service levels by 65%. [McKinsey & Co]
What is the outlook for investing in AI and IoT in the supply chain industry?
Investing in artificial intelligence (AI) and the Internet of Things (IoT) is changing how industries optimize their supply chain. 70% of retail and manufacturing businesses have started a digital transformation project in their supply chain operations. By December 2021, manufacturing supply chains will have invested in supply chain resiliency and AI, resulting in productivity improvements of 15%. [IDC Manufacturing Insights]
How is the IoMT industry growing?
The IoMT (The Internet of Medical Things) is the fastest growing industry, predicted to reach a $160 billion market size by 2022. There are 500,000 medical technologies on the market designed to improve the quality of life. [Deloitte]
What is the focus for smart railway systems?
As the railway system grows, there is a growing focus on smart railway systems to help connect urban cities and reduce carbon emissions. It is predicted that by 2050 passenger mobility will increase by 200-300% and that freight activity will increase by 150-250%. [Mordor Intelligence]
Supply Chain Management Statistics 2023
- The global supply chain industry is worth a whopping $15.85 billion.
- Only 22% of businesses and companies currently have a proactive supply chain network.
- The estimated value of out-of-stock items in 2020 was estimated to be more than $1 trillion due to the COVID19 pandemic.
- The Transportation Management System (TMS) is expected to have a compound annual growth rate of 11.2% from 2020 until 2027.
- 38.8% of small businesses based in the US experienced supply chain delays due to the pandemic.
Statistics About the Impact of Inventory on Operations and Facilities
Table 1: Inventory Statistics in U.S. Retail
|Year||Inventory per Sales|
(Source: U.S. retailers, June 2019)
Table 2: Growth of Private Warehouses in the U.S.
|Year||Number of Warehouses||Percentage Increase|
(Source: Private warehouses in the U.S., 2013-2021)
Table 3: Trend towards Smaller Warehouses
|Warehouse Size||Average Size|
|200,000 – 50,000 sq. ft.||400,000 sq. ft.|
What is the current inventory-to-sales ratio for U.S. retailers?
As of June 2019, U.S. retailers are sitting on approximately $1.36 of inventory for every $1 in sales.
Why do retailers tend to overstock their inventory?
Most retailers overstock their inventory to prevent stockouts and ensure that products are available if a customer wants to make a purchase.
What are the costs and challenges associated with overstocking inventory?
Capital is tied up and unavailable for other uses, such as making nimble business decisions or investing in productivity-boosting technologies. There is also an increased risk of shrink as products age or expire, as well as added costs associated with housing and managing the added inventory.
How has the number of private warehouses in the U.S. changed since 2013?
The number of private warehouses in the U.S. has risen from 15,763 to 18,182 since 2013, a growth of more than 15.3 percent.
What has driven the growth of private warehouses in the U.S.?
The growth of private warehouses in the U.S. has been driven by factors such as a healthy and expanding overall economy driven by consumer spending and business investment, as well as the desire to reduce shipping times to accommodate customer desires for faster shipping options.
What is the trend towards smaller warehouses?
There is a movement towards smaller warehouses, as small as 200,000 to 50,000 square feet in some cases, from an average of about 400,000 square feet. This trend is driven by the need to use space more efficiently and accommodate more types of inventory.
How can operations use their space more efficiently in smaller warehouses?
Operations can use their space more efficiently by implementing an intelligent warehouse slotting process, putting inventory exactly where it needs to be, and investing in technologies like AS/RS or goods-to-person to reclaim vertical space and potentially double storage capacities without expanding the facility’s footprint.
Supply Chain Disruptions Statistics 2023
- Supply chain disruptions cause significant loss in terms of reputation (54%), logistics (54%), and finances (62%).
- The most frequent cause of supply chain disruptions within the US are unplanned IT outages (68%).
- Up to 30% of companies do not analyze the cause and source of their supply chain disruptions.
- The most common event that can lead to global supply chain disruption are mergers and acquisitions (66%).
Supply chain trends
Table 1: Supply Chain Disruptions
|Supply chain disruptions||Every 3.7 years||1 month or longer|
Table 2: Climate Disasters in the USA
|Weather and climate disaster events||Since 1980||$1.975 trillion|
Table 3: Shortages and Increased Costs
|Event||Percentage Increase||Lead Time|
|Shortage of critical parts and materials||74%||–|
|Shipping cost for raw materials||50%||–|
|Price of timber||120%||2 weeks|
|Shipping costs due to container shortage||30%||–|
|Production of shipping boxes||9%||–|
|Price of wood pallets||50%||Limited supply|
|Shortage of ABS plastic||35%||–|
|Paper and pulp volume increase||30%||3 times longer lead time|
Table 4: Supply Chain Trends
|Rise of third-party logistics||–||–|
|Autonomous supply chain||By 2025||Driverless forklifts, robots in warehouses, delivery drones|
Table 5: Impact on Companies
|DHL||150% increase in fulfillment division||Supply Chain Digital|
Why are supply chain disruptions becoming more frequent?
Across all industries, we can expect more frequent supply chain disruptions, occurring every 3.7 years, lasting one month or even longer. This is due to the change in supply and demand, natural disasters, and the impact of the COVID-19 pandemic.
How have supply chain disruptions affected the cost of materials?
The cost of shipping raw materials has increased by 50% due to the manufacturing rebound in China and the global acceleration by countries rebuilding their inventories. Additionally, the price of timber across Europe has increased by 120%, and there is a 35% price increase for ABS plastic, which is used in the automotive industry.
How has the shipping container shortage affected shipping costs?
The shipping container shortage has led to an increase in split shipping, increasing shipping costs by 30%.
What are the effects of the changing demand in e-commerce?
The changing demand in e-commerce has increased third-party logistics (3PL) as consumer demands have increased. Global courier company, DHL, has experienced a 150% increase in its fulfillment division.
What is the outlook for the future of supply chains?
Executives predict the rise of the autonomous supply chain, which includes driverless forklifts, robots in warehouses, and delivery drones that will be adopted into supply chains by 2025. Additionally, production of boxes needed for shipments has increased by 9%, and containerboard mills are struggling to keep up with the demand.
Inventory Accuracy and Visibility Statistics 2023
|Small businesses inventory tracking||43% of small businesses in the US do not track inventory or use manual systems|
|Average inventory accuracy||The average US retail operation has an inventory accuracy of only 63%|
|Late order shipment||34% of businesses have shipped an order late due to inadvertently selling a product that was not in stock|
|Worldwide cost of inventory distortion||An estimated $1.1 trillion, including shrinkage, stockouts, and overstock|
|Cost reduction through reducing stock-outs and overstocks||Reducing stock-outs and overstocks can lower overall inventory costs by 10%|
|Increase in inventory accuracy through item-level tagging||Item-level tagging can increase inventory accuracy from 63% to 95% when implemented properly|
|Retailers planning to leverage real-time inventory visibility||Approximately 72% of all retailers plan to leverage real-time inventory visibility through automation, sensors, and analytics|
- 69% of companies do not have full visibility of their supply chain, whereas only 6% have full visibility.
- The global supply chain market is set to experience a compound annual growth rate of 11% until 2027.21
- Supply chain visibility is one of the top strategic priorities for companies around the globe.
- According to some estimates, proper item-level tagging can increase inventory accuracy to up to 95%.
- The average United States retail business has an inventory accuracy of just 63%.
- Approximately 34% of retail businesses shipped an order late because they sold a product that was out of stock.
- The most commonly used KPI for supply chain monitoring is daily performance (40%).
Q: What percentage of small businesses in the United States do not track inventory?
A: 43 percent of small businesses in the United States do not track inventory or do so using a manual system, according to a source.
Q: What is the average inventory accuracy for a U.S. retail operation?
A: The average inventory accuracy for a U.S. retail operation is only 63 percent, according to a source. This can lead to stockouts, excess carrying costs of inventory, and a poor customer experience.
Q: What percentage of businesses have shipped an order late due to selling a product that was not in stock?
A: According to a source, 34 percent of businesses have shipped an order late due to inadvertently selling a product that was not in stock. This leads to a decrease in customer satisfaction and can negatively impact your business.
Q: What is the worldwide cost of inventory distortion?
A: The worldwide cost of inventory distortion, including shrinkage, stockouts, and overstock, is estimated to be $1.1 Trillion, according to a source.
Q: Can reducing stockouts and overstocks lower overall inventory costs?
A: Yes, reducing stockouts and overstocks can lower overall inventory costs by 10 percent, according to a source. This frees up capital that can be used for other business initiatives.
Q: Can item-level tagging improve inventory accuracy?
A: Yes, according to a source, item-level tagging using RFID tags can increase inventory accuracy from 63 percent to 95 percent when implemented properly.
Q: How many retailers plan to leverage real-time inventory visibility?
A: Approximately 72 percent of all retailers plan to leverage real-time inventory visibility using automation, sensors, and analytics to reinvent their supply chains, according to a source.
Inventory Management Software Statistics 2023
- Around 17% of small businesses use inventory tracking software such as Quickbooks to manage their inventory.28
- An astounding 67.4% of managers at supply chains use Microsoft Excel to keep track of and manage their inventory.
- Approximately 46% of small-to-medium businesses don’t track inventory or use a manual method instead.
Inventory management trends
|Inventory Management Trends||Statistics|
|Inventory distortion cost in 2020||US$1.8 trillion [IHL Services]|
|Decrease of Europe’s vehicle selling inventory by 2030||25% from 280 million to 200 million vehicles [PwC]|
|Delays in shipments and longer lead times||74% of businesses [Capgemini]|
|Reevaluating warehouse locations||48% of businesses due to shifting trade patterns resulting from changes in the US economy [BlueGrace Logistics]|
|Supply chain reinvention with real-time visibility enabled by automation, sensors, and analytics||72% of retailers [Zebra]|
|Out-of-stock shortages in the chemical industry||85% of distributors [National Association of Chemical Distributors]|
|Increased investment in demand forecasting and predictive planning in 2021||56% of businesses [Bain & Co]|
|Reduction of reliance on working with only one supplier||68% of businesses [Capgemini]|
|Diversification of manufacturing supplier base||62% of businesses [Capgemini]|
|Support for reshoring||64% of North American manufacturers [Supply Chain Dive]|
|Delivery time of online gifts during the holiday season||4-6 weeks due to COVID-19-related port closures in China and Vietnam [CNN]|
Q: What is the cost of inventory distortion in 2020?
A: The cost of inventory distortion in 2020 amounted to US$1.8trn, according to IHL Services.
Q: How can reducing stock-outs and overstocks impact inventory costs?
A: According to Zebra, reducing stock-outs and overstocks can lower inventory costs by 10%.
Q: What percentage of businesses have experienced delays in shipments?
A: According to Capgemini, 74% of businesses have experienced delays in shipments and much longer lead times.
Q: What is the expected decrease of Europe’s vehicle selling inventory by 2030?
A: According to PwC, there will be a 25% decrease of Europe’s vehicle selling inventory from 280 million to 200 million vehicles by 2030.
Q: How many retailers plan to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics?
A: According to Zebra, 72% of retailers plan to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics.
Q: What percentage of distributors reported out-of-stock shortages in the chemical industry?
A: According to the National Association of Chemical Distributors, 85% of distributors reported out-of-stock shortages in the chemical industry.
Q: What percentage of businesses are looking to reduce their reliance on working with only one supplier?
A: According to Capgemini, 68% of businesses are looking to reduce their reliance on working with only one supplier, and 62% diversify their manufacturing supplier base.
Q: What is the percentage of North American manufacturers that support reshoring?
A: According to a recent survey conducted by Thomasnet, 64% of North American manufacturers support reshoring.
Q: How long can consumers expect delivery time for online gifts during the holiday season?
A: According to CNN, consumers can expect a 4-6 week delivery time of online gifts during the holiday season due to the temporary closures of ports in China and Vietnam caused by COVID-19. Experts suggest that consumers need to purchase their Christmas gifts online sooner.
Inventory Management Money and Finances Stats
|Total Assets||$1.1 trillion|
|Percentage of US GDP||7%|
|Inventory Cost||$1.43 for every $1 of sales|
|Warehouse Space Cost||$5.08 per square foot|
Q: How much do inventory, accounts receivable, and accounts payable account for in assets?
A: They account for $1.1 trillion in assets, which is approximately 7% of the US GDP.
Q: What is the cost of warehouse space in the United States?
A: The cost of warehouse space in the United States is about $5.08 per square foot.
Q: What is the ratio of inventory to sales for American retailers?
A: American retailers carry about $1.43 in inventory for every $1 of sales.
Q: What is one of the top reasons for startups to fail?
A: One of the top ten reasons for startups to fail is that they do not manage their inventory.
How Can These Inventory Management Statistics Help You or Your Business in 2023?
Supply chain management and having a robust inventory management system are of utmost importance for any modern company or business. However, supply chain disruptions and the lack of visibility continue to persist as issues.
Inventory management systems and supply chain monitoring are constantly evolving, despite the fact that the COVID19 pandemic impacted them on a global level. Since supply chains have such a huge impact on company profits, cost reduction and optimization are very valuable.
Reducing supply chain costs from 9% to 4% has the potential to double a company’s profits, which is exactly why 57% of companies believe that supply chain management gives them a more competitive edge within their respective industry.
To sum everything up, these inventory management and supply chain statistics send one clear message, and that is that effective supply chain management is necessary in order for a business to grow and thrive.