Current Trends on Inventory Management

Companies who have a best-in-class inventory management software don’t guess how much stock to buy but they keep a steady flow of raw materials, work-in-progress items and finished goods moving from manufacturing to consumer, over a variety of distribution channels. Inventory management is all about having the right items on hand at the right time to meet customer demand while controlling costs and minimize waste and loss.

Companies need to stay on top of trends in inventory management, understand the drivers behind them and determine whether it makes sense to be an early adopter — or let someone else work out the bugs.

The major components that play role in Inventory Management

AGVs and AMRs

Customers are demanding ever-faster deliveries, so businesses are increasingly looking for ways to work more efficiently. Automated guided vehicles (AGVs) and automated mobile robots (AMRs) are tools to help warehouse operators collect products from decks and pallets. While AGVs have been around for a while, AMRs are newer on the block.

AGVs rely on magnetic strips or wires to follow fixed paths through a warehouse, meaning that they aren’t great fits for facilities that change their floorplans or have a lot of people moving around. AMRs are among a new class of “collaborative robots,” and they don’t need to rely on fixed routes to navigate a space because they include smart sensors, like those used in self-driving vehicles. They can even be “paired” with a human worker.

Both types of vehicles reduce the time it takes to move items around the warehouse and free up human staff for other tasks to help fulfill orders faster. Because AMRs don’t require additional investments in infrastructure, such as the wires to guide AGVs, they can be more cost effective than you might think and relatively easy to put to work.

Artificial intelligence

When it comes to warehouses and inventory management, systems with artificial intelligence (AI) and machine learning (ML) capabilities work hand-in-hand with those IoT initiatives. The problem is that a lot of the data manufacturers and retailers collect now isn’t structured to fit neatly in a spreadsheet: Think product images, videos shot as those AMRs move around warehouses, various SKU formats and the data produced by all manner of sensors and scanners. Machine learning could be employed to spot out defective products or packaging so that customers only get quality items. And, the nature of inventory means that your data set is continuously growing and changing. All that makes it difficult to analyze.

Cloud-based solutions

The ability to track inventory in real-time can be a game-changer for any business. Because cloud-based solutions allow all of your company’s data to be stored securely and centrally and accessed from anywhere, decision-makers can more quickly respond to and solve inventory issues. And, cloud, like software as a service, delivers other benefits over on-premises applications: Lower upfront costs since there’s no hardware to buy, faster implementation, consistently up-to-date software and better security and resilience than most organizations can build on their own.

From an inventory management perspective, situating data in a central location simplifies adding new warehouse locations, even doing pop-up fulfillment centers in stores. Centralization enables a GPS location project, where you track on-the-move pallets, containers or delivery vehicles in real time to predict when items will arrive at their destinations. That data can then be mined to find the reasons for recurring delays.

Any cloud-based inventory management software you choose, whether SaaS/cloud or on-premises, should integrate with your finance and accounting and order management systems and allow for granular tracking of inventory down to the SKU or barcode, whether items are in a warehouse or in transit.

Distributed inventory management

Distributing inventory across multiple warehouses can reduce transportation costs and speed up delivery times — if you can put the right products in the right places and consistently dispatch items from the warehouse closest to the customer.

Success requires data analysis to see where orders are coming from versus where stock is located, the flexibility to set up distribution centers in the right sites based on data and the technology to direct suppliers to properly split up shipments.

In most cases, when a company is managing more, smaller warehouses versus a few huge locations, it can more tightly manage inventory.

Predictive picking

Again, this trend depends on data analysis — in this case, using unstructured data to predict behavior by recognizing interdependencies and patterns. Predictive picking software can direct businesses to initiate fulfillments before an order has even been placed. Success depends on compiling data, such as planned marketing campaigns, weather and seasonality to predict customer orders with a high degree of accuracy.

If that sounds complicated, it is. Success at scale requires a lot of data and powerful analytics tools. But most manufacturers and retailers can start down the predictive path by analyzing historical data to spot demand surges for specific products, beyond the obvious like candy in late October or pool chemicals in May. Then, they can use human intelligence to figure out why there was a spike and whether it’s likely to recur. If so, the company can have enough stock on hand and design a fulfillment process that minimizes shipping times and touches. And that data can itself eventually feed into a predictive picking program.

Success Strategies for Trend Adoption

Which trends make sense for your business? That depends on your company’s strategic objectives, budget, size and appetite for technology. Here are some points to consider when evaluating a trend. Weigh the cost/benefit against other long-, medium- and short-term projects on the table, and ensure there is an executive sponsor who can define the plan’s success.

New ERA of SCM

Supply chain management has surely evolved throughout the years. Moreover, with the advent of automation, AI, and data analytics, supply chain processes can now be more streamlined than ever due to the rise of e-commerce and smart Logistics.

While we focus more on resilience and risk management to deal with pandemic-related disruptions, transform your Supply Chain digitally. Our expert team at CodeValue Technologies can consult world class digital solutions to your upcoming and current bottle necks.

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