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4 Ways to Use Technology in Inventory Management

Inventory is the biggest entry in the balance sheet of many distribution companies and fast deliveries are becoming increasingly important in today’s digital world – especially as an increasing number of people are working remotely. Failing to stock the right items doesn’t only result in lost sales. Unhappy customers can ruin a company’s online reputation in a few clicks and if you can’t deliver, one of your competitors most likely can.

On the other hand, piling up too much inventory comes with a price and a high risk of ending up with obsolete stock.

Due to this, ensuring the right products in the right warehouse locations is becoming a higher priority for management teams and companies worldwide are implementing various techniques for making inventory management and procurement more efficient.

Many big enterprises are already ahead with complex systems and highly automated processes in place. However, there are also a range of tools and technologies available to SMBs that will help them stay competitive and grow their businesses. Here are some ways technology can help you simplify inventory management.

1. Take demand forecasting to new heights

Forecasting is the heart and soul of inventory management, especially for companies facing an influx of orders due to Coronavirus. But even when there isn’t a pandemic, forecasting is key to running a successful fulfillment operation.

When you fail to forecast accurately, inventory management quickly shifts to your worst nightmare. Suddenly, you need to send out refunds, deal with customer complaints, and spend more time and money to fix your mistake, which could have been prevented with simple inventory software.

Accurate forecasting makes all the difference when running a business. In fact, inventory forecasting is considered the most important inventory management practice by 61.3% of retailers and manufacturers.

While this can be a daunting task, there is software that will help you get it done. A tool that include features enabling you to follow a product through its lifecycle sorts items based on different demand patterns will help you become more sophisticated in your demand forecasting. If you can also account for seasonality and campaigns and gain insightful analytics, you will be well equipped to deliver on your upcoming customer demand.

Inventory management and product lifecycleWith the right tools and skill, you’ll be able to better predict the future and ensure both accurate short-term and long-term plans for you and your business.

2. Streamline your warehouse management 

Cutting costs, improving efficiency and effectively allocating resources are essential tasks in day-to-day inventory work. To foster growth, you need effective systems that are geared towards boosting your warehouse’s productivity from the first step to the last.

Using warehouse management software (WMS) helps you streamline much of the process. An annual survey conducted by Peerless Research found that 93% of its respondents incorporated some type of WMS, topping previous data that only showed 90%. Make sure your system supports mobile devices so that your warehouse employees don’t have to waste time walking back and forth from workstations. Consider investing in tablets or use company smartphones; there are plenty of apps to assist you in your daily warehouse work.

A good way to organize your inventory is to use ABC classification. This system sorts inventory into different classes depending on their annual consumption and pick frequency. An inventory optimization software will do this classification automatically, and you can use it to optimize the SKU placement in your warehouse.

ABC Analysis DiagramGood software will also perform inventory simulations. This helps you to dodge what-ifs when it comes to incorporating strategic changes and brand-new tactics. These simulations test various parameter settings as well as multiple situations for inventory policies and service levels, giving you foresight on the possible effects of the change you wish to implement.

In some software, you can also set up virtual warehouses which incorporate inventory pooling strategies for low demand items located in various stock locations. Physical warehouses in a certain area cluster and act as a virtual warehouse, which cuts down supply chain inventory levels while fulfilling demand for the entire region.

3. Automate your restocking

Do you spend a good chunk of your time determining which orders you need to place for your warehouse and calculating replenishment? If you do, then you need to oversee your product replenishment more efficiently, and there’s no better way than with a tool that automates replenishment.

With the right tool, the only thing you need to worry about is reviewing order notifications to approve your order proposals. For your fast-moving items, you can even set automatic approval so that a truck shows up at your warehouse doorstep as soon as your inventory hits or falls below a certain level.

4. Get the latest reports and make more informed decisions

Reporting and analytics are crucial since they tell you about your business’s performance. Obtaining data and analyzing them correctly enables you to make well-informed decisions when it comes to aspects such as stock ordering and replenishment, among others.

working together on a laptopHowever, mishaps can happen if your data is not up-to-date and properly consolidated. To avoid headaches, turn to technology that can provide you with the latest updates on your inventory performance in one glance. Most platforms have customizable dashboards ingrained with key performance indicators such as service levels, inventory turnover rate, and stock value, among others. The best software also alerts you with situations that demand attention, so you can be satisfied on your warehouse’s overall state.

Your turn! 

There are plenty of tools and systems out there and it’s not always easy to know which one to invest in. Some tips for choosing the right software are to:

  • Pick a vendor that understands your business type and company size. If you’re a small eCommerce company, don’t choose a system made for enterprise-size manufacturers.
  • Any solution provider can come up with an impressive list of features. However, the most important is whether you will be able to utilize it for your business. Take a look at the interface; is it intuitive enough for everyone to understand? Does it work on mobile, anytime, anywhere? And do you get support in case you get stuck?
  • Who is developing the software and how long have they been in business? It’s better to place your trust a stable, well-fund organization with relevant experience. Remember that this is an investment in your company’s future, and you want to ensure that you still have the best software and support several years from now.

If you need more information about automating your warehouse and inventory operations, read up on inventory management software here to learn more.

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