Tackling Inventory Inaccuracy in Real Companies: a Literature Review to Understand the Errors and Root Causes

In the context of inventory management, it is essential to monitor stock levels by keeping track of both the data recorded in management systems (inventory record) and the physical stock in the warehouse (physical inventory). Ideally, these two values should match, as assumed in many studies on inventory management. However, in daily operations, discrepancies can arise between recorded data and physical stock, leading to the so-called issue of inventory record inaccuracy. Inventory inaccuracy can become so severe that 65% of companies’ inventories can experience discrepancies, undermining operational efficiency, storage costs, and service levels. Despite these consequences, many firms still neglect (or, even worse, accept) the inventory inaccuracy issue, dedicating little effort to its resolution and control. Among the main reasons for this lack of action, two literature gaps stand out. First, although several experimental studies have explored how to navigate the inventory inaccuracy problem in companies, an up-to-date and comprehensive overview of the errors triggering inventory inaccuracy is missing. Second, before inventory inaccuracy can be effectively addressed, its root causes must be understood. Yet, although some analyses of inventory inaccuracy causes exist, the literature often mistakenly treats inventory inaccuracy errors as root causes when, instead, they are merely symptoms. Therefore, a state-of-the-art of the real root causes is still missing. Due to these gaps, companies risk responding only to surface-level issues without addressing the systemic factors behind inventory inaccuracy. This reactive approach allows this problem to persist over time, hindering its prevention. To bridge these gaps, this study presents a systematic literature analysis, examining both the main errors and the root causes of inventory inaccuracy. Ultimately, the contributions of this paper will help companies recognize the origins of inventory inaccuracy, encourage proactive action to fix this problem and improve warehouse performance.