The topic of the paper is the application of digitization in inventory management. In order to address the topic, supply chains, their characteristics, inventory management in them, the role and function of inventory and the specifics of their management are described. Then it was written about digitization in inventory management in supply chains, application of digital technology, software and hardware, new trends in inventory management. The last chapter related to the application of digitization in inventory management on the example of the company Decco Croatia d.o.o. and its comparison with the closest competitors. Inventory optimization can help to more easily overcome warehouse and inventory management issues with reduced inventory. Optimizing inventory can allow a business to have the right amount of inventory and reduce the amount of capital used for production and operations, while improving customer experiences. It makes it possible to correctly predict customer demand and deliver what consumers want and when they want it, without holding too much inventory. The company Decco S.A. uses an advanced inventory management system, including a high-tech warehouse equipped with a Remmert storage system. This warehouse can accommodate 2,087 cassettes on an area of 2,160 square meters, with an automated selection system that enables up to 35 selections per hour. This system reduces product damage, improves order processing speed and ensures inventory protection from weather conditions and UV radiation. With this, Decco ensures the high quality of its PVC profiles for doors and windows. Decco Croatia uses a regular WMS system. A WMS can help companies receive, process and dispose of items in the most efficient way based on business rules and warehouse flow. Before warehouse management systems, pen and paper were used to receive items and match them to purchase orders and physical invoices – and some smaller warehouses still use that approach today. The WMS system supports the use of RFID technology and integration with billing and other software so that items can be automatically received, confirmed and matched to digital purchase orders with barcode scanning and printed labels for easy storage and retrieval.