The supply chain disruptions of the past several years have forced most businesses to revisit their inventory management philosophies and systems. Across every industry, more effective and advanced methods of managing inventory have emerged, which are shaping the way organizations do business and create a positive customer experience. Here are some of the ongoing challenges in inventory management and the top inventory management trends shaping the future.
Ongoing Challenges in Inventory Management
Inventory issues in warehousing, retail, and eCommerce are not unusual. Every business understands the pressure of ensuring its current inventory meets expectations while avoiding costly overstocking or errors.
When inventory isn’t managed properly, it can lead to a host of problems that can impact your bottom-line results. For example, poor demand forecasting can lead to incorrect inventory levels, resulting in overstocking or stockouts. Poor visibility and inefficient tracking can lead to errors and a subpar customer experience.
Inventory Management Trends Shaping Tomorrow
Inventory management refers to having the right items on hand at the right time to satisfy customer demands while also minimizing costs. It’s a delicate balance that doesn’t happen by chance. The businesses with the most success in managing inventory are generally using cutting-edge solutions. Here are some of the inventory management trends driving these inventory management successes:
1. Cloud-Based Inventory Management
Cloud technology has revolutionized the way organizations approach inventory management and other aspects of a business’s operations. Instead of relying on costly local servers, which take up space, require maintenance, and can become obsolete, businesses are switching to the cloud. This allows workers and management to access inventory data in real-time, which improves efficiency, lowers costs, and reduces errors.
2. Artificial Intelligence & Machine Learning
Artificial intelligence (AI) and machine learning have become must-have tools for businesses. In the area of inventory management, businesses can use AI and machine learning to analyze market trends and historical data. These tools can also be used to ensure inventory management strategies account for dynamic market conditions, such as weather, traffic, geopolitical factors, and more.
3. Automated Mobile Robots (AMRs) and Automated Guided Vehicles (AGVs)
To address increased customer demand for faster deliveries and the need for better workplace conditions, businesses will likely implement the use of more automation solutions. Specifically, automated mobile robots (AMRs) and automated guided vehicles (AGVs) can help warehouse workers move inventory from place to place and fulfill orders. AGVs are better suited to moving large items like pallets. AMRs rely on smart sensors so they can work alongside workers to put away inventory and fulfill orders.
4. Distributed Inventory Management
Instead of relying on a single, massive warehouse to hold all of your inventory and process all your orders, spreading things out is becoming more common. Distributed inventory management refers to dispersing inventory across multiple regional warehouses so orders can be fulfilled in the location closest to the customer. This makes inventory management easier and fulfillment times faster.
5. Predictive Picking
In the future, predictive picking software will allow businesses to start order fulfillment activities before even receiving orders based on trend analysis. Most retailers and manufacturers are able to predict with a reasonable degree of accuracy how demand will surge for certain items, like candy near Halloween or holiday decorations in the Fall. This data can help them get a jump start on order fulfillment and deliver an even better customer experience.
6. Blockchain
Blockchain will continue to have a significant impact on inventory management due to unprecedented traceability and security. The technology’s distributed ledger records every movement and transaction within the supply chain securely, from raw materials to order fulfillment. This reduces the risk associated with loss and promotes greater collaboration among stakeholders.
7. Data Analytics
A common trend among manufacturers, distribution centers, and third-party logistics (3PL) providers is to leverage the use of real-time data analytics to make more informed and profitable business decisions. Those same decisions can also boost efficiency. For example, IoT sensors can drive real-time inventory data, allowing for automated re-ordering of in-demand products. Data analytics can also identify emerging trends in the market, both those that could be threats to the business and others that could be opportunities.
8. Omni-Channel Inventory Control
Today and in the future, there will be a growing trend of omni-channel inventory control. This involves managing inventory across various channels to create a more seamless shopping experience for customers. For example, a customer can purchase an item online and choose to have it shipped to their home or pick it up at a local store. Even if it is shipped, the business can dispatch it from the most cost-effective location, which may be a warehouse or local retail store.
9. Internet of Things (IoT) Sensors
While the Internet of Things (IoT) isn’t necessarily new, the profound impact of these sensors and devices will continue for the foreseeable future. An IoT sensor is something affixed to embedded in a product that can send real time tracking data on inventory conditions. These devices can relay information like location, temperature, and other product data to make inventory management easier and more efficient.
10. 3D Printing
3D printing technology allows a business to create various items layer by layer with precision. Instead of waiting for a distant manufacturer to create and send products to your warehouse, you can create them on demand, which also allows for some degree of personalization. 3D printing offers another benefit. It can allow your business to manufacture parts to keep technology up and running or customize storage systems in the warehouse.
It’s an exciting time to be in warehouse management with so many different options to improve systems and efficiency. Trends like automated guided vehicles, AI, and cloud-based inventory management are just a few of the innovations shaping warehousing and fulfillment. These inventory management trends are driven by a need to drive more efficiency, lower costs, improve visibility, and create a better overall customer experience.
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