Emerging inventory management trends are redefining operations, and everything from AI to RFID to the Internet of Things is changing inventory management and tracking. Learn about print-on-demand, warehouse automation, cloud-based management, and omnichannel inventory control, and discover how to supercharge your inventory management practices.
How Inventory Remains Challenging for Businesses
Regardless of size, businesses must manage their inventory efficiently. This involves a series of processes to order, store, track, and re-stock products in a way that is cost-effective and competitive. It’s just as tricky as it sounds, particularly when an organization must rely on a variety of business partners to perform as expected.
Inventory challenges are nothing new for businesses. But they have become a hot-button issue in recent years, after the pandemic illustrated the many inefficiencies in the supply chain. While things have improved, they aren’t necessarily fixed. Many businesses still struggle with various inventory management challenges, including:
- Inefficient Processes — As demands shift or supply chain issues fluctuate, these issues can impact inventory management efficiency. For example, they can lead to more errors, stockouts, or overstocking.
- Changing Consumer Demands — Customer preferences are always changing, which requires businesses to be nimble with their inventory management processes.
- Problems With Labor — Even with the right tools in place, many businesses still struggle with labor issues, which can impact efficient inventory management.
- Lack of Visibility — Not having sufficient inventory visibility throughout the supply chain can impact efficiency, costs, and the customer experience.
- Outdated Systems and Data — Handling inventory manually is no longer the best way to get the job done and remain competitive. Many other businesses have already implemented updated systems that offer advanced features as well as cost-savings.
Top Inventory Management Trends of 2024
Because so many businesses are struggling with inventory management and supply chain challenges, these issues have garnered a great deal of attention over the past several years. And fortunately, many solutions have risen to the surface. Here are some of the top inventory management trends of 2024 that are helping businesses reduce costs, become more efficient, and enhance the customer experience.
1. Cloud-Based Inventory Systems
Most warehouses today have moved beyond relying on powerful local servers to store and process inventory and other data. Instead, the trend has moved more toward cloud-based inventory systems, which can be accessed from any wireless device and updated in real-time. An inventory management system can update the latest data, sometimes automatically using RFID tags, and everyone who accesses the system can view that data instantly.
2. Artificial Intelligence and Machine Learning
Artificial intelligence and machine learning are innovations now being leveraged in many industries. These technologies can help businesses identify and take advantage of market trends, optimize inventory management processes, and minimize unnecessary errors.
3. Internet of Things (IoT) Sensors
Instead of having employees manually read product information or scan individual barcodes, businesses are transitioning to using IoT sensors for inventory management and order fulfillment. These sensors can read inventory RFID tags in real-time and process the movement of products throughout a warehouse. A business can create automated re-ordering “triggers” to prevent issues with stockouts.
4. Automation and Robotics
Distribution centers and warehouses have been experiencing a revolution with the implementation of automation and robotics. These technology solutions allow businesses to streamline all aspects of the inventory management and order fulfillment processes. Using solutions like automated sorters and drones can reduce errors and improve overall efficiency.
5. Predictive Analytics
The power of predictive analytics is reshaping inventory management across all industries. Thanks to the sheer volume of data available, businesses are harnessing the power of advanced algorithms to predict potential supply chain interruptions and forecast future demand. This helps businesses quickly adjust to things like natural disasters, seasonality, and new consumer trends.
6. Blockchain Technology for Transparency
Blockchain is a commonly misunderstood technology because it is confused with Bitcoin. It’s not the same. This is a decentralized distributed ledger that allows businesses to store every movement and transaction within the supply chain, creating a transparent record that reduces risk. More businesses are adopting blockchain as a means to inject transparency into the supply chain and improve consumer trust.
7. Omni-Channel Inventory Management
An inventory management trend that is gathering steam is omni-channel inventory management. This involves businesses that manage inventory across various channels, such as in a remote warehouse and in local brick-and-mortar stores. This strategy allows customers to buy products online and pick them up in the store (BOPIS) or simply have shipments come from closer to home so they arrive quicker.
8. 3D Printing On-Demand
Instead of ordering every item necessary for inventory, some businesses are using 3D printing technology to produce parts and products in-house. For example, 3D printers can produce simple parts, like gaskets or trim, on demand. This eliminates the need to pay for shipping or factor in turnaround time. In the future, 3D printing may also be used for product personalization at the warehouse level.
9. Vendor-Managed Inventory (VMI)
Another trend in inventory management is handing the reigns over to vendors. Specifically, vendor-managed inventory (VMI) refers to taking a more collaborative approach to your inventory management process. Instead of siloing everything, your suppliers will take a more active role in monitoring and replenishing your products by sharing data with your business.
10. Reverse Logistics
Many companies fail to consider how the returns process impacts their inventory management. But it certainly can. Taking a more proactive approach to reverse logistics can not only reduce costs but also lower your overall return rates, improve customer satisfaction, and lessen the negative environmental impact of your business. Fewer returns also translate to a more streamlined inventory process with fewer opportunities for errors.
Effective inventory management is essential for controlling costs, meeting customer demands, and minimizing waste. If your business wants to improve its overall results and position itself apart from the competition, employing the right inventory strategies is a must. For most companies, this involves implementing forward-thinking technology solutions that can elevate your inventory management practices.
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