Phantom stock : definition and resolution

The discrepancy between the amount of stock that is physically in the shop or warehouse and the amount recorded in the computer system results in significant losses to the business.

What is phantom stock ?

Phantom stock refers to goods that appear in the inventory management software as being available at their storage location, when in reality they are missing. It therefore refers to the discrepancy between the physical stock in the shop or warehouse and the stock recorded in the computer.

This can be due to orders that have been confirmed but could not be delivered to the end customer due to product unavailability. This phantom stock can lead to problems in the supply of raw materials to the production lines, which can ultimately lead to the suspension of the production of a product.

Phantom inventory is generally caused by errors in the manual management of goods. Phantom stock concerns both warehouses and shops.

How to reduce phantom stock ?

As phantom stock is often due to human error, it is necessary to favour the use of stock management software, such as warehouse management software (WMS), which will be able to limit and considerably reduce this type of anomaly.

A WMS will allow you to manage and optimise storage and order preparation operations with correct execution.

Phantom stock is a hindrance for companies. This is why the installation of a WMS is one of the first steps towards the elimination of phantom stock. The system will allow tracking of all goods movements and guide operators during stock replenishment while avoiding errors. A WMS is the key solution, as it will ensure total control of warehouse stocks and goods will no longer be lost or damaged. It will also eliminate the margin of error in stock counting.