Products or materials in warehouse inventory that fail to meet quality standards, are damaged, expired, or otherwise unsuitable for sale or use. This category includes items with manufacturing defects, products damaged during handling or storage, expired goods, returns that cannot be resold, and materials that don’t conform to specifications.
Effective defective inventory management is crucial for maintaining operational efficiency and customer satisfaction. Accumulation of defective stock ties up valuable warehouse space, inflates carrying costs, and can lead to accidental shipment of substandard products to customers. Modern WMS platforms enable systematic tracking and disposition of defective items through dedicated status codes and workflow processes.
For example, when a warehouse receives returned electronics with cosmetic damage, the WMS can immediately flag these items as defective inventory, quarantine them in a designated location, and trigger appropriate disposition workflows such as repair, liquidation, or disposal, preventing them from re-entering sellable inventory.
