Six Ways To Prevent Business Inventory Damage

Six Ways To Prevent Business Inventory Damage | Six Ways To Prevent Business Inventory Damage | A business’s inventory takes up a significant portion of the cash flow. This case is more critical for small and medium-sized enterprises. Generally, an SME can’t afford to stock large amounts of inventory; it increases the need and cost for management. This also means that inventory damage is on the top of the list of things that the warehouse manager has to control as there is no extra stock in case things go down south. To understand the importance of reducing inventory damage and ways to reduce it, let us know what inventory shrinkage/damage is.

Inventory damage refers to the loss of inventory for multiple reasons. These include:

  • Theft and fraud
  • Receiving damaged stock
  • The stock expiring
  • Inaccurate data input
  • Obsolescence

No matter how good a business’s inventory management is, there are bound to be some damages or losses due to some factors. However, the key is to minimize the damage so that it won’t affect your business and bottom line. Below are a few ways to prevent inventory damage. Keep reading.

1. Control the access systems to your inventory 

Inventory management, much like data management, requires selective personnel access. It is crucial to limit inventory access to the most trained and trustworthy employees within your company. So be very careful when hiring the right person for the job.

You will also have to maintain each employee’s access level, which should be strictly work-related. Any piece of inventory that is not associated with their work should not be accessible. It is also essential to issue accounts and passwords to these employees only and no one else. In this age of technology, biometric locks make achieving high levels of security extremely easy. When you limit the number of people who have access to the inventory, you automatically limit the number of miscalculations and the possibility of theft. This also increases your chances for a more accurate audit.

2. Maintain your warehouse 

Regular maintenance of the warehouse can help you reduce inventory damage. If the cause of damage is related to the storage area, you can prevent it by a regular inspection of the place. If environmental factors affect the storage quality, optimize your warehouse to accommodate your product according to the desired storage climate.

Suppose you find it challenging to maintain a warehouse. In that case, you can rent out self storage units fully equipped with up-to-date climate control and security features. This is crucial if your inventory comprises mainly of perishables and other temperature-sensitive items. The storage unit will also help you cut down maintenance costs as they come with various payment plans for both short-term and long-term storage.

3. Reduce internal theft 

Employers don’t want to believe that their employees are stealing from them, but no exception should be made regarding inventory management. So it is best to take precautionary steps to reduce internal theft and have some policies regarding the crime in place. When you hire new employees, do a complete background check and assess their character and credibility. Check for things like a criminal record, reliable references, and perform a drug screening test before hiring them. Apart from that, install security cameras everywhere to ensure complete security.

4. Implement the double-check system 

A significant reason for inventory loss is wrong data inputs. The person in charge of inventory management can accidentally enter the wrong numbers, leading to financial and inventory number issues. The best solution to this problem is to implement a double-checking system. Have one more employee take complete notes of the stock in storage and invoices to ensure the numbers entered are correct. This practice will help you reduce misinformation drastically as well as improve the inventory management system.

5. Automate management and make the most of tech

Manual inventory management is prone to human errors and inaccuracies. However, you can reduce the chances of such mistakes by merely automating your inventory management procedure through software. Automating inventory management will drastically cut down shrinkage and damage related to administration errors.

Additionally, your inventory requires proper recording systems, which is why you should assign them unique SKUs and UPCs. Product codes that are simple, clear, and easily recordable help reduce inventory shrinkage caused by bad data entry. You can use software for SKU generation to simplify the task.

6. Reduce damage due to mishandling 

Often inventory damage happens due to mishandling. Warehouse managers drop things while handling them, or containers get squished while stacked. It is best to keep the shape and weight of your stock in mind while storing them. You should have proper racks and storage areas to support the material accordingly and make them more accessible. Invest in the necessary equipment to carry and lift your inventory. Store your goods in such a way that the most needed ones are easily accessible. It also helps to plan your warehouse accordingly and train warehouse managers adequately. The lesser the mishandling of stock, the lower the chances of them suffering unnecessary damage.


SMEs and startups cannot afford to compromise on inventory loss. Every step taken to enhance inventory management is a step in the right direction, bet that tech integration or training workers to carry a box. The methods mentioned above can significantly help you optimize your inventory management procedures and reduce damage and shrinkage in the long run.