Netstock’s Inventory Management Benchmark Report highlights AI adoption, rising inventory challenges, and best practices for optimization across supply chains in 2024.
Boston, MA, August 1, 2024 — Netstock, a leading provider of predictive supply chain planning software for small and medium-sized businesses (SMBs), today announced the release of its Inventory Management 2024 Benchmark Report. Featuring insights from Netstock’s 2,400+ global customers, the report offers a look into the current state of inventory management, revealing key challenges and opportunities facing supply chain decision-makers. With Netstock’s extensive experience in supply and demand planning software, advanced technology solutions and proven track record of helping businesses optimize their inventory globally, the company is uniquely positioned to bring this first-of-its-kind report to market.
“This report is not just a reflection of the current inventory management landscape, but a critical tool for businesses navigating the complexities of today’s global market,” said Netstock CEO Ara Ohanian. “Understanding how your business ranks compared to others in the industry is crucial to enable decision-making that drives innovation and resilience across supply chains. With over $25 billion in inventory managed worldwide, Netstock is uniquely positioned to amplify these findings across the market—empowering companies to make informed decisions, overcome these challenges and stay ahead in an ever-evolving supply chain ecosystem.”
According to Netstock’s findings, SMBs have held onto fewer goods this year, which is a promising sign of high inventory performance and meeting customer demands. However, businesses are still struggling to get rid of slow-moving inventory, whereas nearly 80% of SMBs suffer from a combination of insufficient forward planning and being overstocked. Purchase orders steadily rose by 9% in early 2023, and skyrocketed ahead of the holiday shopping season for retail businesses to 16%. Businesses weren’t moving enough goods to keep up with the big stockpiles accumulated. By 2024, average inventory spending returned to a near identical pre-crisis level (less than 1% difference from 2023).
The top findings include:
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- Only 23% of SMBs have invested in AI: Data integrity or security risks (23%) and inconsistent or inaccurate answers (20%) are the two biggest challenges Netstock’s survey respondents experience with AI. AI-powered supply chain solutions can play a pivotal role in helping enhance forecasting abilities, inventory optimization and demand planning for organizations.
- Long lead times and lead time variability are top challenges for SMBs: The foremost supplier challenge reported was lead time variability (72%), while 52% reported facing challenges with longer lead times. Inconsistent lead times make planning and optimizing inventory a difficult endeavor. The majority of SMBs struggling with lead time variability source their inventory from China (67%), more than from the US (56%), Canada (21%) and Mexico (just 9%). This variability has coincided with more businesses deciding to source production domestically.
- American SMBs are shifting away from overseas supply and bringing production closer to home via nearshoring: Only 25% of US respondents prefer offshore suppliers over domestic. The nearshoring boom offers an opportunity to invest in predictive supply chain planning software that supports organizational visibility and resilience.
- The excess stock problem is growing: Excess stock grew to an average of 38% of inventory, highlighting a struggle for SMBs to manage their inventory. The problem is not exclusive to small businesses, though—large SMBs with over 500 employees saw overstocking rise from 40% to 44% of total inventory.
“The supply chain is undergoing an exciting transformation, and it’s mission-critical for businesses to embrace inventory management software to keep up in this dynamic environment,” said Netstock CTO Barry Kukkuk. “Netstock’s technology empowers businesses with unparalleled visibility and accuracy, allowing them to make informed decisions, reduce costs and respond swiftly to market challenges. Looking ahead, our team is dedicated to driving efficiency and growth for our customers worldwide.”
Netstock’s Inventory Management 2024 Benchmark Report is now available and can be accessed here.
