In response to rising interest rates and persistent supply chain disruptions, small and medium-sized businesses (SMBs) are adopting strategies centered on reducing excess inventory, reshoring operations, and investing in emerging AI innovations. 

To gain deeper insights into inventory management within this crucial sector, Netstock recently conducted a comprehensive inventory benchmark study focused on SMBs. The report based on the study’s findings highlights five emerging trends that emphasize the urgent need for SMBs to develop more robust inventory management strategies.

Netstock’s Inventory Benchmark Report reveals a 9% year-over-year reduction in overall inventory levels. However, slow-moving inventory remains an issue, a lingering effect of over-ordering during the COVID-19 pandemic, and ongoing supply chain problems. Balancing inventory in an uncertain economy continues to be a major concern.

The report also emphasizes the impact of lead-time variability, which worsened by the end of 2023 due to global unrest. For 72% of SMBs, this variability, more than lead time length itself, complicates planning and optimization. The reliance on offshore suppliers, especially in China, has prompted many U.S. SMBs to explore reshoring or nearshoring to reduce risks and gain control over their supply chains.

Larger SMBs, with better access to financing, tend to carry excess inventory, accounting for 30% of total inventory among surveyed companies. This highlights the complex relationship between company size, credit availability and inventory strategies. Smaller SMBs, lacking financial flexibility, must be more agile in their approach.

Finally, AI adoption in inventory management remains low, with only 23% of SMBs implementing AI solutions, mainly due to concerns about data integrity, security and reliability. Despite this, AI holds significant potential to enhance inventory forecasting and decision-making.

Netstock draws insights from its customer base of more than 2,400 SMBs, offering critical insights into global trends, challenges and optimization strategies in inventory management.

Please CLICK HERE to download the Special Report.