Odoo helps various business and their functions including in the domain of inventory and supply chain. Based on Success Stories from various industries, we have compiled here what are the top inventory and supply chain challenges that Odoo can solve so that business can run smoothly and can scale easily.
1. Overselling Out-of-Stock Items
The disconnect between e-commerce front-ends (like Shopify, WooCommerce, or Magento) and the actual warehouse inventory leads to a critical customer experience failure. When a customer purchases an item online that appears to be in stock, but the physical bin is empty, the business enters a crisis mode of apologizing, processing refunds, and potentially losing the customer for good. This phantom inventory problem creates a constant state of anxiety for support teams who have to clean up the mess left by disconnected systems.
This issue is often compounded by high-volume sales periods where inventory moves faster than the synchronization intervals of legacy connectors. Without a real-time link, the "available to promise" quantity is always a historic guess rather than a current fact. This forces businesses to hold safety stock that ties up capital, just to avoid the risk of selling what they don't have.
2. Disconnected Inventory Silos
Businesses frequently operate with fragmented inventory data where retail stores, wholesale divisions, and online channels maintain their own separate ledgers. This separation makes it impossible to view the global stock position, resulting in "trapped" inventory that sits unsold in a retail backroom while the online store marks the item as out-of-stock, missing potential revenue.
To manage this, teams often resort to time-consuming manual reconciliation processes, relying on spreadsheets that become outdated the moment they are saved. This lack of unification prevents intelligent stock transfers between locations and leads to over-purchasing stock that the company actually owns somewhere in its network but simply cannot see or access efficiently.
3. Lack of Real-Time Visibility
Sales teams often find themselves in embarrassing situations where they cannot confidently promise delivery dates to clients because their inventory data is days old. Relying on a weekly "stock report" means that by Tuesday, the data is already irrelevant, forcing reps to call the warehouse to physically check shelves before closing a deal.
This operational blindness slows down the sales cycle and erodes trust. When decision-makers cannot see the flow of goods in real-time, they cannot react to supply chain disruptions or demand spikes. They are forced to drive the business looking in the rear-view mirror, reacting to last week's inventory levels rather than today's reality.
4. Manual Stock Adjustments
"Vanishing" inventory is a common symptom of relying on Excel or paper-based tracking methods where human error is inevitable. Without a rigid system that enforces double-entry inventory (where every move has a source and a destination), items simply disappear from the record due to typo errors, forgotten entries, or theft that goes unnoticed until the annual audit.
These manual adjustments create a "black hole" in the accounting books, leading to massive write-offs at the end of the year. Because there is no audit trail of who changed the number and why, management cannot identify the root cause of the shrinkage, whether it be process failure, training issues, or dishonesty.
5. Traceability Blind Spots
For industries like food, pharma, and electronics, the inability to track lot and serial numbers from raw material receipt to the final customer is a compliance nightmare. If a supplier recalls a specific batch of batteries or flour, a company without full upstream and downstream traceability has to recall everything, causing massive financial and reputational damage.
Legacy systems often treat inventory as simple quantities without unique identifiers, breaking the chain of custody. This makes it impossible to answer simple questions like "Which customers received products made from Batch A of the raw material?" quickly, turning a minor quality issue into a full-blown existential crisis for the company.
6. Multi-Warehouse Chaos
Managing stock across multiple physical locations or third-party logistics (3PL) providers often devolves into chaos without a centralized brain. Companies lose track of goods that are "in transit" between warehouses, leading to situations where stock is neither here nor there, but floating in a system limbo that prevents it from being sold.
This lack of visibility complicates replenishment logic, as managers might order new stock for Warehouse A while Warehouse B is overflowing with that very item. The inability to automatically route orders to the nearest warehouse with stock results in higher shipping costs and slower delivery times for the customer.
7. Expiration Date Management
In industries dealing with perishable goods, a lack of First Expired, First Out (FEFO) logic leads to massive spoilage costs. Warehouse staff naturally pick the most convenient box rather than the one that is expiring soonest, leaving older stock to rot at the back of the shelf.
Without system alerts warning about approaching expiry dates, businesses are forced to throw away product that could have been discounted and sold. This direct hit to the bottom line is often invisible until the periodic cleanup, hiding the true cost of inventory mismanagement.
8. Complex Variant Management
Legacy systems often struggle or crash when handling products with multiple attributes, such as a t-shirt that comes in 5 sizes, 10 colors, and 3 materials. Creating these thousands of combinations often requires manually setting up individual SKUs for each variant, which is a massive administrative burden.
This complexity makes reporting a nightmare; managers can't easily see "how many red shirts do we have in total?" but must instead sum up dozens of individual SKU lines. The rigidity inhibits product innovation, as companies avoid launching complex product lines simply because their software cannot handle the matrix of possibilities.
9. Manual Procurement Planning
Purchasing managers often rely on "gut feeling" or messy spreadsheets to decide what to reorder, leading to the twin evils of stockouts and overstocking. Without automated reordering rules based on real lead times and sales forecasts, procurement is always reactive, scrambling to expedite shipments when shelves go empty.
This manual approach fails to account for seasonal trends or vendor reliability. A human buyer might forget that a specific supplier closes for a month in summer or that lead times have doubled, whereas an intelligent system would dynamically adjust the reordering points to ensure continuity of supply without bloating the warehouse.
10. Inaccurate Asset Tracking
Companies often lose track of their own internal assets—expensive tools, laptops, or heavy machinery—because there is no check-in/check-out system. When a specialized tool is needed for a job, it can't be found, forcing the company to buy a replacement while the original sits forgotten in a technician's van.
This lack of accountability creates a culture where asset loss is accepted as the cost of doing business. Without a system to assign custody of an asset to a specific employee or location, there is no incentive for care, and the financial register of fixed assets becomes completely disconnected from physical reality.
11. Landed Cost Errors
Many importers significantly underprice their goods because they calculate costs based solely on the supplier's purchase price, ignoring duty, freight, insurance, and port fees. This results in "phantom profits" where a product looks profitable on paper, but the company is actually losing money on every sale once the logistical overhead is factored in.
Allocating these costs manually across a container filled with hundreds of different items is incredibly complex. A system that doesn't automatically split freight bills by weight or value and update the inventory valuation leaves the finance team guessing at the true margin, leading to strategic pricing errors.
12. Cross-Docking Inability
Warehouses often inefficiently store goods that are already sold and should be immediately shipped out, a process known as "put-away" followed immediately by "picking." This double handling wastes labor hours and slows down fulfillment, as items are shelved only to be taken down hours later.
Without software that supports cross-docking, the receiving team has no way of knowing that the pallet they just unloaded is urgently needed at the shipping dock. This disconnect adds unnecessary friction to the supply chain and increases the "dock-to-stock" time, dragging down overall warehouse efficiency.
13. Barcode Latency
Warehouse operations grind to a halt when scanners are slow or disconnected from the central database. If a picker scans an item and has to wait 10 seconds for the system to register the pick, or if they have to walk to a dedicated terminal to type in data, the throughput of the entire facility collapses.
This latency forces workers to memorize tasks or write them down, reintroducing human error into a process that should be digital and instantaneous. Modern warehousing requires split-second feedback; any lag in the barcode system translates directly into fewer orders shipped per hour and higher labor costs per unit.
14. Dropship Coordination
Managing dropshipping manually involves a tedious game of "email ping-pong" where sales orders must be converted into purchase orders and emailed to suppliers one by one. This process is prone to errors, such as forgetting to forward an address change or failing to relay the tracking number back to the customer.
Without an automated system that treats dropshipping as a native route, scaling becomes impossible. The administrative overhead of manually processing each order eats into the thin margins of dropshipping, and the lack of visibility into the supplier's fulfillment status leaves the merchant unable to answer customer support queries.
15. Return Management (RMA) Chaos
Returns are often the "wild west" of e-commerce, where items arrive at the warehouse without documentation and sit in a pile for weeks. Without a structured RMA process, the business loses track of whether the item should be refunded, replaced, repaired, or discarded, leading to angry customers waiting for their money.
Furthermore, failing to quickly grade and restock returned items that are in good condition creates "zombie inventory" that exists physically but isn't available for sale. This lack of reverse logistics efficiency turns returns into a pure cost center rather than an opportunity to recover value and retain customer loyalty.
16. Packaging & Unit of Measure Issues
Confusion often arises when a company buys items in one unit of measure (e.g., "Pallet" or "Box of 12") but sells them in another (e.g., "Unit"). Legacy systems that cannot handle these conversions automatically force staff to manually calculate quantities, leading to inventory counts that are wildly off—such as showing 100 "boxes" when there are actually 100 "units."
This mismatch wreaks havoc on pricing and stock levels. If the system doesn't understand that breaking a box creates 12 units, it might trigger a reorder unnecessarily or, worse, sell a single unit at the price of a full box. Handling these conversions natively is essential for accurate inventory valuation and seamless operations.