Inventory Management has long been a headache we suffer, and an unwieldy beast we attempt to tame. It’s a complex and demanding task of checking and rechecking stock, and never actually quite being able to say ‘job done’ before it all changes again.
Yet it is imperative to the successful running of any retail or manufacturing business. When mistakes happen, they hit the business in two main ways: cost and inefficiency.
Technology is seeking to help assuage these inventory management problems, and that technology is becoming increasingly advanced. The purpose is to remove the manual elements of inventory management that are slow and open the possibility for errors. Every business now uses some technology, in some way, to help with their inventory management. But is it enough?
Why Technological Advances are Needed
Inventory managers know their job. However, their jobs are increasingly in a different landscape to just a few years ago. In fact, changes to businesses and the supply chain landscape are being driven by technology. It’s hugely changed businesses and the way they function. These changes are still happening, but it’s worth understanding what’s happening, why, and what the future holds.
Real-Time Updates in Inventory Management
The traditional manual model of inventory management meant that nothing was ever actually accurate or a true picture. The manual method required someone to physically look at orders coming in versus those going out, and physically counting inventory and noting it down.
Therefore, by its very nature, it couldn’t be done continually. It was usually done at periods determined by the type of business, but certainly not real-time. What’s more, being a manual process, you couldn’t verify its accuracy easily. And there are always going to be mistakes when it’s a human doing the job – especially a repetitive and laborious one.
Now, however, technological advances mean that we can use RFID technology to track goods and manage our inventory. The tags and scanners automate the process and keep a track of everything going into, and out of, the warehouse – on a continual basis. Each time a product is moved, it’s logged. You can trace every individual item down to the precise location, and per second.
For businesses who provide services, as well as goods, RFID technology can also be invaluable for asset inventory management. Mistakes are eliminated, accuracy is maintained, customer service is improved, and decisions can be made more appropriately.
Valuable Insights into Inventory Management
Managers are always having to make decisions based on inventory. These decisions can be made more reliably when they have been made in the context of insightful analysis of all data pertaining to inventory management. Therefore, it’s not just about saving time, but about giving managers the tools to actively improve business decisions.
Technologically driven inventory management allows the collection and analysis of data in a big way. This is then used to the business’s benefit. Insights into particular products, and their demand and supply, make for more efficient sales decisions. These product by product insights are likely to be setting the bar for how big data is used in the coming years.
However, managing big data and gaining valuable insights requires new and different skill sets. Technologically driven inventory management is more complex, and without the right skills, it can hinder rather than help. Only when it is used expertly and appropriately does it actually aid the business.
The Difference Between Retail and Fulfilment is Narrowing
E-commerce has been made possible through technological advances, and the e-commerce boom is only sustainable thanks to technological advances in inventory management. In reality, this means that the difference between retail and fulfilment is becoming less clear cut.
Whereas in the early days of e-commerce we still saw a distinct difference between the online retailers such as Amazon and the physical high street store, now there is a hybrid in between – the physical store that has an e-commerce arm. This is only possible when you have an integrated inventory management system that holistically tracks inventory across all the different channels of retail.
Traditionally it’s been incredibly difficult for businesses to keep pace with the technological advances as they happen – the rate of change has been so fast that it’s been near impossible. Whilst it’s true that we will likely always see the pioneers of technology leading the way, technological advances are taking less time to reach everyone else. This means all businesses and the way they function changes together.
Now that technological advances have gained momentum, there is such a range available to us that we can select the right technology for our business needs, rather than being constrained by a ‘make-do’ attitude.
Your inventory management technology can be as unique as your business is, and custom-built without being prohibitively costly. This also means that they can grow as you do, being scaled according to need. This likely means that new business models will emerge as a result of technological advances.
The Different Types of Technology in Inventory Management
As there is no longer a one-size-fits-all approach to inventory management, the technology is hugely diverse. However, they all have the same core purpose: to sort, control, and provide information.
Automated inventory management technology uses automation through tracking technology such as barcodes and automated identification and data capture (AIDC) technology such as RFID to collate information and manage the flow of goods.
These can be both active and passive. Passive systems require someone to manually activate a scanner or reader. Active systems detect, track, and analyse automatically.
Smart technology and apps are also contributing to the technological advances in inventory management. These systems do require some manual entry though, and that’s where errors tend to happen. However, they can be a versatile and worthwhile choice for smaller businesses.
Choosing the right technology for your inventory management needs can be complex. All should represent a worthwhile return on investment. For advice on using technology to your advantage in inventory management, our consultants are on hand. Call on +44 (0) 121 517 0008.