For companies that are mainly into distribution, inventory management is the heart and soul of their existence. In fact, it’s the most significant component of their balances sheet. And with more and more people working remotely, it’s vital to deliver goods on time. If not, it won’t only result in loss of sales but also lead to customer dissatisfaction. And, as you know, one unsatisfied customer is enough to ruin your online reputation.
On the other hand, if you overstock, in a way, you are obstructing the cash flow. And not just that, overstocking could also lead to obsolete stock.
That is why it’s of paramount interest to stock the right products in suitable warehouse locations for companies. To that end, companies, globally, are executing several techniques for making inventory management and procurement more efficient.
In fact, several big companies are already using complex inventory management software to automate their inventory processes. Nevertheless, there are technologies available for small businesses that help that’s budget-friendly and will also help grow their business.
Here are some ways how distribution companies benefit by using technology in inventory management.
#1 Speculate Demand of Products
Forecasting is central to inventory management, especially during these times when a few ecommerce companies are inundated with huge orders. That said, even in normal circumstances, forecasting is the key to successful order fulfilment.
When you are not able to speculate your demands correctly, inventory management will go topsy-turvy. You will have to deal with customer complaints, refunds, among many other things. You can take the hassles out of inventory management if you could start using only inventory management software.
Speculating demand for products or demand forecasting is considered to be one of the most critical inventory management systems by 61.3% of retailers and manufacturers.
Though demand forecasting is considered difficult, the software makes things easier for you. A tool that comes with features that allow you to track the product life cycle based on demand patterns will help you have more updated demand forecasting. Plus, you could use the seasonality of products and run campaigns to get better insights, enabling you to deliver products as per customer demand.
Thus with the use of the right inventory management software, you will anticipate future demand for both short term and long term selling.
#2. Upgrade your Warehouse Management
When it comes to inventory operations, reducing cost, efficient inventory allocation, and all is an integral part of it. To streamline the inventory operations in your warehouse and increase its productivity, employing warehouse management software (WMS) is crucial. The software should be accessible on mobile devices so that warehouses employees can easily keep track of the goods coming in and going out. One of the best ways to organize inventory is to leverage the ABC system. The software will help you categorize products, making SKU placement in the warehouse easy.
Some software can even be used to set up a virtual warehouse that helps assemble low demand items from located in warehouses in different locations.
#3. Take care of Restocking
If your fast-moving stock items need constant replenishment, it would be better to have a tool that helps automatic replenishment.
Though you may have to verify order notifications, restocking becomes easier. In the case of fast-moving products, you could even think of automatic approval so that the loading vehicle shows up at the warehouse as soon as the inventory falls below a certain level.
#4. Barcoding & Scanning
Barcode is an electronic data entry using a scanner. The barcode data could be about SKU, a lot number, purchase order, customer shipment, etc. Once scanned, the data could be accessed to learn more information and take action.
Indeed, the WMS vendor offered bar code functions as well; however, the inventory app should also provide the same.
#5. Reporting Tools
If you are running an inventory business, it’s essential to have updated real-time data regarding the product’s status, order, shipment, driver’s whereabouts, and much more. In fact, you could have different types of reporting tools to be part of your inventory management app to carry out reporting tasks smoothly. Benefits of Inventory Management Reporting tools:
- Seamless flow of information
- Increased productivity
- Reduction in human errors
#6. Inventory Alerts
Inventory software sends you alerts if there’s low stock. The signals can be received via SMS or an email. You can keep track of the stock status, status of the shipment, issue alerts, and more with accurate inventory alerts.
Benefits of inventory alerts:
- Minimize stock waste
- Optimize Inventory levels
- Cross department visibility of data
- Drive sales
- Full operational control
#7. IoT Integration
Inventory management based on IoT is highly in demand as IoT, combined with RFID, helps manufacturers address traditional inventory management issues. An IoT based inventory management not only gives you real-time visibility of the inventory but record inventory details automatically.
Adding IoT into the inventory management system means you will get better insights about the items’ location, assets’ live status, movement, and more.
Besides, it offers benefits such as:
- Automated tracking and reporting
- Real-time info on assets, location, movement, and quantity
- Lead time optimization
- Inventory Optimization
Distribution companies are neck-deep in inventory allocation. And if undertaken manually, then be assured, things will go for a toss in no time. To get a handle over inventory management, businesses should take on the software plunge and right their wrongs in inventory management. Inventory management software is the need of the hour. You could easily streamline your operations, as we mentioned above, with the right inventory management software. If you need any suggestions, check out the GoodFirms page on inventory management.