Practical Advice for Inventory Management
Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

Inventory management news isn’t always the most exciting. As such, we’re easily drawn to headlines such as those that discuss Amazon’s inventory management drones. However, is this just pie in the sky for the majority of us? Or do we need to start realising that the practical advice concerning the future of inventory management does involve these exciting headlines for everyone, and we need to get with the programme?

It’s Not Just Amazon

It’s easy to dismiss what Amazon is up to in the world of inventory management as being unobtainable for the average business which needs inventory management. However, it’s not just Amazon who is using advanced technology. Lost inventory is a real problem for the majority of supply chain businesses. MIT has now risen to Amazon’s challenge, and have created RFly.

RFly uses robotic drones which are combined with battery-free Radio Frequency Identifier (RFID) stickers which are attached to every piece of inventory. These stickers are relatively cheap and work in a similar way to barcodes. The drone can scan the warehouse far more efficiently than a warehouse worker. This way items can be pinpointed within a warehouse and less time is spent tracking down lost items.

However, this isn’t the only capability of these drones. They can improve stock keeping, reduce incidences of running out of stock, and optimise inventory levels so that you are able to operate to just-in-time delivery systems. Visibility is massively improved, which of course aids the whole process. It can also plug some of the gaps caused by human error.

Given that shrinkage – or effectively writing off in accounting terms – due to lost, damaged or mislaid stock is a huge issue for those tasked with inventory management, perhaps we should look to this technology sooner rather than later.

Stepping Away From Robotics

However, you don’t have to embrace drones if you want to improve your inventory management. There are plenty of other steps you can take which don’t require miniature helicopters zooming all over your warehouse. There are other means of implementing best practice which will improve your existing inventory management and help to streamline the process and bolster the bottom line.

Assess the Current State of Play

All too often in inventory management, we get caught up in doing things simply because that’s the ‘way they’ve always been done’. Asked pertinent questions, we sometimes discover we don’t even know the reason why we do something.

Inventory Consultants can take a detailed look at what you’re doing now and suggest practices which will increase visibility and lead to efficiencies. You can expect a worthwhile return on investment as the purpose of conducting this ‘audit’ is to reduce and remove wastage.

Start at the Beginning

One of the simplest ways to improve your inventory management is to improve your visibility. You should know or be able to see what is in every nook and cranny of your storage space. This information should be up to date and accurate. Whilst you may feel drones aren’t for you, technology of some sort is your solution here. A warehouse management system is essential for this level of visibility over your inventory management.

Add Demand Management and Inventory Optimisation

Once you’ve taken the first steps of improving visibility, then you can begin to use that information to your advantage. The way to do this is through a two-pronged approach of demand management and inventory optimisation.

These two go essentially hand in hand – you cannot appropriately manage demand unless the right inventory is in the right place at the right time. However, this doesn’t mean you can sit on ‘just in case’ inventory as this costs time and money in terms of storage space, and product life spans.

Our consultants manage this in various ways, including Reorder Point (ROP) inventory management techniques which work effectively when the demand for a product is continuous. The ultimate aim is always to minimise inventory whilst still meeting the demands of the customer.

The best way to implement demand management and inventory optimisation techniques is to bring in the inventory optimisation experts who will be able to conduct a skilled full inventory analysis for you. They will draw on both historical and forecast data to establish your optimal inventory amounts for each product.

Add Affordable and Proven Technology

If drones still seem a thing of the future, you can introduce technology which has already proven its value in inventory management. Whilst GPS is most frequently thought of as most important at the logistics end of the business only, where vehicles need directing, it can prove enormously valuable higher up the chain in inventory management.

By using GPS to track your inventory you’re adding to visibility which will, in turn, add to overall performance. It can seem daunting to get new technology on board, but by choosing tried and tested methods such as GPS, you can be sure you’re choosing something which will definitely help.

Then Add More Technology

Once you realise that GPS technology can help, you’ll feel more confident by adding in other, proven-to-work technology too. At the moment, your workers most likely use handheld scanning devices. Not so long ago these were the cutting edge of technology, however, they are increasingly not up to the job. They aren’t keeping pace with the changes in inventory management.

Instead, you should consider using wearable scanning devices such as rings and wrist bands for scanning computers. This way, scanning is accurate, but in a hands-free way. If you are responsible for a high volume of turnover, then they are a valuable consideration.

Layer It Up With Artificial Intelligence (AI)

We’re nearly up there with the drones, but not quite. You can’t do the job of a machine, and if you continue trying to do so then you will, quite simply, be outstripped by your competitors. You need to leverage technology to give you the insight and intelligence you can’t get through human labour and systems alone.

This way you’re not stuck doing things the way you always have but are continuously improving on systems and processes for the future. Forecasting and demand management inherently becomes more accurate.

So, you might not need drones just yet, but you do need to start implementing the technology we have available to us. It can be daunting, so get the experts on board by giving us a call today on +44 (0)121 517 008.

Leave a Reply

Your email address will not be published. Required fields are marked *