How An Inventory Control System Assists in Reducing Dead Inventory?


Emily Lynch

Senior editor

Parul Saxena

Chief editor

Last updated: April 9, 2021

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Inventory plays a huge role in the overall profitability of a business, especially for online retailers. Inventory management is no longer something that is limited to factories and manufacturing concerns, every entity that has some sort of inventory in its possession must have an able inventory control system.

Why should enterprises have inventory control system?

Plainly put, an inventory control system is a tool that helps businesses manage their working capital investment in inventory effectively. Too much of stock will result in pile up of dead/obsolete stock. The risk of damage and spoilage is also higher. Thin stock levels can possibly harm operations by resulting in unexpected stockouts when a huge order is placed.

However, with effective inventory management, an online retailer of any size will be able to maintain optimal stock levels which will reduce the possibility of dead stock pile up. Well, the goodness of having an effective inventory management system doesn’t end there.

Here is how an effective inventory management system will help in dead inventory management.

1. Bid goodbye to inefficient manual processes

How an inventory control system assists in reducing dead inventory 1

Manual inventory management systems have inherent shortcomings that make inventory control difficult and often redundant. For instance, under manual inventory management, records cannot be compiled instantly for decision making. Making purchasing decisions for businesses spread over multiple locations is cumbersome. An inventory control system makes it easy to monitor stock levels across all storage locations.

2. Gives real-time visibility of stock statusHow an inventory control system assists in reducing dead inventory 2

An effective inventory management system can be connected across multiple geographical locations where the business could be having warehouses or stock centers. The system can generate real-time stock reports of stock-in-hand, marked for delivery, non-moving and dead stock levels. Based on such reports, dead stock in specific locations can be identified for sale or disposal.

3. Embrace the goodness of stock levels, EOQ & JIT

How an inventory control system assists in reducing dead inventory 3

One of the powerful features of an inventory management system is that aids in setting up various stock levels like minimum, maximum, re-order, danger level, etc.. Advanced stock management systems also aid in computing Economic Order Quantity (EOQ) which helps in cutting down costs with no compromise on inventory purchase or number of orders. With optimal level of purchase, dead inventory management becomes efficient and robust.

4. Channel specific inventory control

How an inventory control system assists in reducing dead inventory 4

Different stocks have different behavioural pattern. Some sell high in online stores while others only through physical stores. With an inventory control system it becomes easier to know which stock sells the highest through which channel. Stock orders can be placed based on past demand trends leading to high RoI.

5. Physical inspection of stock

How an inventory control system assists in reducing dead inventory 5

Why does dead stock pile up? In most cases, it happens because obsolete stock is not identified and segregated from current stock on a regular basis. With the help of a dead stock management system, it is possible to track the shelf life of a consignment and thus dispatch or store it accordingly. Needless to say dead stock can be forecasted with better precision thus curtailing the quantum in the long-term.


Handling inventory is easily said than done and with manual systems it is nearly impossible and also highly inefficient. An automated dead stock management system makes it easier for businesses to stock the right amount of stock and reduce the possibility of dead stock pile up.

Strategist at, a multi-channel commerce platform. Helps in product development that simplifies the needs of B2B and B2C business in multi-commerce environment. A writer by passion who loves sharing ideas on emerging trends.

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  1. Inventory management is such a critical process and very important to manage effectively to prevent the issues like dead stockpiles, spoilage and storage cost which can be overcome by using techniques like cycle counts, first in first out etc. Tips mentioned above are helpful for the same.

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