Managing an inventory means dealing with the acquisition, organization, storage, and movement of your stocks. All these activities cost your business money and if you manage your inventory poorly, you will end up losing big.
In fact, inventory mismanagement and poor judgment cost non-grocery retailers in the United States more than $300 billion back in 2018. According to a survey of over 200 senior retail decision-makers, 53% of unplanned markdowns was the biggest cause of the loss.
With the introduction of the inventory management software, retailers, especially the wholesale distribution industry, have found a cost-effective way to optimize their inventory processes, reduce their expenditures, and boost their sales. But how do you maximize your inventory management and reap great rewards in the process?
These technological trends are poised to shape the future of inventory management and will most likely become significant solutions for business growth in the future.
Predictive Inventory Management
One of the many benefits of inventory management software is that it helps you automate repetitive and time-intensive processes and provides you with a real-time picture of your inventory. In just a quick look, you will know your stock levels, enabling you to make data-driven decisions to resupply or move your items for shipping.
But what if your inventory management system does all the decision-making for you? With automated inventory analysis, your inventory optimization software chooses and purchases SKUs for your inventory long before you customers decide to buy.
It may not sound like the typical inventory management features and capabilities you normally expect, but it is totally possible. Several companies are now developing self-learning inventory management and warehouse systems, allowing these systems to generate near-perfect inventory forecasting.
These systems analyze unstructured data using intelligent, complex algorithms to identify customer patterns, recognize interdependencies, and ultimately predict customers’ ordering and purchasing probability with almost 100% accuracy. And there are even more reasons to have an automated inventory system.
Robot Warehouse Workers
Robot workers are nothing new. Unimatron rolled out its industrial robot in 1956, the first of its kind. It was capable of lifting and moving heavy material a dozen feet, more or less. Earlier robots proved their usefulness in an industrial setting but these crude models were just mere machines.
There are various ways for warehouse optimization. Robots have already seen action in a warehouse setting in the past as modern inventory optimization solutions. However, those were just mechanical arms programmed to perform tasks that are potentially hazardous or extremely difficult for the average human worker.
Today, advances in engineering, robotics, and artificial intelligence have ushered in smart and self-learning robots that can be deployed in various fields and serve far more purpose than just lifting and moving heavy stuff.
Modern robots designed for warehouse use include automated guided vehicles (AGVs) and automated guided carts (AGCs), like the ones released by Amazon earlier this year. Autonomous mobile robots (AMRs), in particular, can be fitted with IoT (Internet of Things) capability on top of AI to deliver, sort, and count items in the inventory.
Warehouses that have deployed robots have experienced significant savings in cost, a much higher level of inventory precision. There is also a great spike in warehouse productivity and efficiency. On that note, it’s also essential to manage your IT services securely shared on this guide. For now, this trend is not the norm yet but it will be a huge hit in the near future.
Omnichannel Inventory Management Software
Market experts and economists say that omnichannel retail is the future of commerce. If that's true, then there’s a little argument when one claims omnichannel inventory management is not far behind.
However, some things are easier said than done. Omnichannel inventory management is one complicated matter that requires multiple solutions.
In a brick-and-mortar retail store setting, ownership of the item transfers from seller to buyer once the customer pays for the item, after which the store hands over the product. The change in ownership is instantaneous and the item is no longer part of the store’s inventory.
When a customer successfully buys something online, the transfer is not immediate. While the buyer is technically the new owner of the product, the item is physically in the store’s inventory, thus taking up space and tying up capital.
Omnichannel retail businesses must be able to move their products quickly from the store or warehouse to customers while keeping their inventory count accurate.
Among the solutions offered is to perform inventory checks and reconciliation on a regular basis. Yet, this is problematic as the process is prone to human errors and inefficiencies, which then results in discrepancies.
Another is to stock inventory across different locations. This setup enables retailers to fulfill orders quickly by shipping the item to the customer from the nearest hub. Another benefit is that it helps address stockouts. When a store or warehouse is running low on certain stocks, they can restock inventory immediately from the nearest warehouse.
Arguably the best answer to the problem is to have a fully capable omnichannel inventory management software that integrates core capabilities of an inventory management system, warehouse management software, and a Point of Sale (POS) system into a single unified package. Such a platform will provide users with unparalleled visibility of all their inventories while providing them with accurate and up-to-date inventory counts.
Managing inventory as an omnichannel retail business poses a serious challenge. Accounting and consultancy services provider PwC conducted a survey on omnichannel retail and discovered that only 19% of the top retailers are able to meet customer demands from multiple channels and still managed to rake in significant profits. The same survey revealed that 32% of responding retailers cited poor inventory visibility as a major hindrance to generating huge sales.
Achieving omnichannel inventory management is complicated. Meanwhile, as omnichannel retail becomes the standard of consumers, it should be a leading priority of retailers and warehouse operators. Additionally, it’s essential to provide multilingual support for driving a multi-channel strategy.
Make Inventory Management Smarter With IoT
Inventory management is a complicated aspect of any business. And there are different inventory management techniques available to utilize along with these tools. Hence, you need to ensure that your business has the right items on hand at the right levels and at the right time for the right cost. Every step you take will cost you money.
The trends stated above will shape the future of inventory management in more ways than one. All innovations will help you increase the efficiency and productivity of your inventory processes. Ultimately, the end goal is to help your retail business reap success through huge sales and fewer expenses.
But there is another technological trend that is slowly building steam and will create a definitive impact on inventory management. And that is the Internet of Things, commonly referred to as IoT.
This technology enables machines, devices, systems, and anything that has Internet connectivity capability to communicate with each other. In a warehouse setting, IoT automates inventory tracking and reporting. This can leverage the barcode system used by small businesses.
All movements, interactions, and developments per product are monitored and documented. This gives manufacturers, warehouse managers, retail business owners constant and accurate visibility into their items' location, quantity, and status, among others.
If inventory management is all about having the right items at the right time at the right quantity and at the right cost, then IoT will give you just that. You may not see it now but IoT will not only change inventory management; it will impact the whole supply chain as well.