In the current business landscape, companies that handle materials, manage supply chains and logistics and oversee inventory operations face significant challenges in optimizing their business processes in a cost-effective and efficient manner. Fortunately, business process automation has emerged as a viable solution for business owners and managers who seek to streamline their inventory processes, including managing stocks, predicting demand, purchasing orders, and shipping.
According to a recent study by Forrester, automation software can reduce operating expenses by up to 90 percent. Automated inventory management systems can help businesses reduce the time spent on routine stock counts and tracking, improve profitability and efficiency, obtain real-time data and accurate forecasts, and enhance the scalability of their business. By adopting automated inventory management systems, businesses can achieve significant benefits.
Note: Studies conducted by Forrester indicate that automation software can help businesses optimize their operating expenses by up to 90%.
Before proceeding to the next section, which outlines the primary advantages and benefits of automated inventory management, we would like to pose a few questions to you.
- Have you ever had to waste your valuable time and resources on processes that were not optimized?
- Is it difficult for you to manage your inventory manually?
- Have you experienced inaccuracies in your inventory counts that have resulted in frustrated employees and customers?
- Is it challenging to forecast inventory needs accurately?
- Do you face issues and hassles with customers who are dissatisfied due to the time-consuming process of delivery or human errors?
- Does tracking inventory become overwhelming, taking your attention away from more business-oriented goals?
We understand how important it is for you to optimize your inventory management to achieve real-time, efficient, and accurate solutions that result in better customer service and demand. Let us explore the benefits of automated inventory control and management, which can help accelerate your business growth.
It’s High Time for Automated Inventory Management
Automated inventory management refers to a technology-based process of inventory management and control within the supply chain. By leveraging this technology, wholesalers and distributors can effectively monitor stock levels in real time. With an automated inventory system, businesses can collect and control data through wireless communication between centralized software applications and integrated smart things such as barcodes and scanners. In 2019, the US witnessed a remarkable increase in the market share of barcodes, accounting for 45 percent of asset tracking across supply chains. As companies across industries face high demand to shift towards cloud-based network infrastructures and SaaS-based inventory management software, the outcomes are evident: advanced capabilities, reduced downtime, cost-efficiency, predictive maintenance, and prompt solutions.
Main Features of Automated Inventory Management Systems
- Monitor real-time data
- Track and fulfill inventory items
- Manage customer order deliveries
- Prevent overstock and outages
- Integrate with established systems
According to the recent Global Market Insights report, the inventory management software market is anticipated to reach a valuation of $5 billion by the year 2026. One of the primary drivers for this growth is the rising demand for streamlined inventory management in the manufacturing sector, along with the need to mitigate risks. Inefficient inventory management can negatively impact business productivity, and therefore, companies are looking towards IoT technologies such as 5G, RFID, adoption of mobile devices, and e-commerce to improve their inventory management practices. Key industry leaders are also focusing on upgrading their inventory management software to strengthen their market positions. For instance, Oracle has already initiated cloud-based advancements in warehouse management systems to reduce inventory costs and improve customer experience.
The ongoing COVID-19 pandemic has further propelled companies to explore advanced, cutting-edge technologies and automation practices such as RPA, cloud-based technologies, data analytics, artificial intelligence, IoT, and Blockchain. As companies seek to minimize human involvement in business processes, the demand for automation is expected to rise, leading to a projected double increase of the worldwide warehouse automation market to $27.2 billion by 2025, according to Statista.
How does an Automated Inventory System Work?
Automated inventory systems are increasingly becoming a popular choice for business owners, primarily because these cloud-based solutions eliminate the need to maintain servers. Whether you are a retailer, a manufacturer, or a warehouse, advanced inventory management systems based in the cloud can streamline the process of asset tracking and stock and order control. Integrating automated inventory management systems with point-of-sale systems can open up a world of possibilities, allowing real-time tracking and monitoring of product positions across the supply chain. This, in turn, helps to gain insights into all operations regarding turnover rates, promotion performance, and profit margins. By leveraging these benefits, marketing teams can track sales on each channel, control underselling, and overselling, and evaluate each promotion’s performance to build more effective campaigns.
Automated reordering comes into play when the stock volume reaches the reorder point, preventing stockouts and generating a purchase order. Timely and accurate reorders can also prevent wasted time and money. Additionally, the system includes product cost analysis and forecasting features, enabling businesses to better estimate future customer demands and trends, predict operating costs and maintenance expenses, and forecast future order management needs. By analyzing data, the system ensures the enhancement of business performance by determining optimal ordering points and evaluating profit margins, and turnover rates. Overall, automated inventory management systems can provide significant benefits to businesses, contributing to better inventory management, improved operational efficiency, and enhanced customer satisfaction.
Why should you invest in Automated Inventory Management?
Businesses can gain several advantages from an automated inventory system. The top 5 benefits to think about are listed below:
Time Efficiency
Conventional methods for inventory management and control are becoming obsolete due to their dependence on manual data analysis from multiple sources. The process of calculating stock levels, generating reports, and evaluating future turnover can be time-consuming, and the results may not always be precise or efficient. However, the integration of point-of-sale systems and demand forecasting technology has led to advanced automated solutions that can continually update data and generate actionable insights, thereby optimizing time and effort. It is worth noting that the elimination of manual data entry can have a positive impact on customer retention by minimizing inventory issues.
Maximized Scalability
By incorporating advanced software into their operations, businesses can significantly enhance their product capabilities and expand their services. The implementation of automated inventory systems eliminates the need for additional personnel and manual tracking of purchase orders, leading to cost savings. This, in turn, provides companies with the opportunity to open new warehouse locations and ensure profitability. The integration of real-time inventory data with other management systems ensures the accuracy of business decisions for expansion, making it a valuable tool for growth.
Complete Data Visibility and Accurate Predictions
Automated inventory management software is a powerful tool that provides retailers and manufacturers with real-time and accurate data on their stock levels. This software can help businesses ensure that their stock is replenished automatically when it runs low. Additionally, by analyzing data trends, companies can make more informed decisions about hiring, optimal reordering points, scheduling shifts, adjusting goals, and ultimately improving sales. The benefits of inventory management software are numerous and can help companies stay competitive in today’s fast-paced business environment.
Synchronization with E-commerce Channels
It is of utmost importance to maintain a constant check on sales across all channels and exercise control over them in order to obtain a comprehensive and synchronized view of all information. Be it an e-commerce platform, in-store sales, or phone orders, aggregating all data into one central location can facilitate the generation of reports, and prevent the issues of underselling or overselling. Not only does this save resources, but it also ensures that the customers have a satisfactory experience.
Improved Quality of Delivery
A recent study conducted by Harvard Business Review among 600 retail outlets in 29 counties has revealed that 72 percent of stock-outs were caused by incorrect in-store ordering and replenishing practices. The manual generation of demand forecasts has been found to be inaccurate, leading to faulty ordering, lost sales, and insufficient stock in the warehouse which, in turn, results in dissatisfied customers and a damaged business reputation. However, with the implementation of automated inventory control software, retailers, warehouses, and manufacturers can be continually notified of ordering demands and perform their tasks without delay, which leads to reduced errors and improved accuracy.
Latest trends in Warehouse and Inventory Management Automation
The adoption of warehouse and inventory management automation has recently gained popularity among businesses due to its ability to expand the client base, enhance visibility, and optimize operations. The COVID-19 pandemic has further accelerated the demand for automation, leading to a competitive landscape. In order to stay ahead, businesses must adapt to the new trends and transform their supply chain and logistics industries. It is anticipated that the global warehouse automation market will exceed $30 billion by 2026.
Let’s dive into some cool new tech trends in warehouse and inventory management automation that can totally change the game and help businesses make more money.
The Internet of Things
The Internet of Things (IoT) technology has revolutionized the way businesses operate by providing a comprehensive performance and automated tracking of all connected devices, including drones, beacons, sensors, automated guided vehicles, automated mobile robots, and other inventory assets. This asset tracking technology can be particularly useful in equipment management for construction, where it can eliminate loss and theft, logistics companies, where it can optimize fleet efficiency and improve on-time delivery, and hospitals, where it can provide real-time visibility to medical devices and patients’ care.
IoT facilitates data storage, sharing, and retrieval, and enables the synchronization of all the devices in real-time. For example, temperature sensors can monitor products during transportation or storage in a warehouse, and if the temperature conditions do not comply with the requirements, they can notify the system and adjust the temperature accordingly.
RFID Tagging
Radio Frequency Identification (RFID) is a technology that utilizes radio waves to track inventory and collect necessary data in a highly efficient manner. By enabling workflow-efficient supply chain management, RFID tagging integrated with the Internet of Things (IoT) allows for 360-degree visibility and real-time tracking of product information. Incorporating IoT with RFID technology facilitates seamless data extraction and tracking of the product, leading to enhanced supply chain visibility and efficiency.
Big Data, AI, and Predictive Analytics
When it comes to data-driven decisions, the combination of big data analytics and IoT technology has proven to be highly effective. In the realm of connected logistics, IoT-enabled devices collect data that is then transferred to AI systems to determine the best course of action and make analytical predictions. By leveraging IoT in conjunction with warehouse analytic software, predictive models can be developed to identify trends, assess the risk of failures, and determine maintenance requirements. Predictive analytics provides warehouse executives with valuable insights such as market trends, shipment delays, inventory demand, pricing distortions, and more. These insights can be leveraged to make better-informed decisions and stay ahead of the competition.
Blockchain
Blockchain is a distributed and decentralized database that enables the storage of digital data in blocks, which are linked using cryptography. As a result, blockchain technology ensures that data is tamper-resistant, thus providing a secure platform for transactions carried out across the network.
According to a research report by ResearchandMarkets, the global blockchain supply chain market is projected to grow from $253 million in 2020 to $3,272 million by 2026. This technology offers significant benefits to manufacturers, logistics, and shipping companies, as it enables the tracking of products at every stage of the supply chain lifecycle.
Blockchain technology’s record-keeping and proof-of-concept approach provides a secure platform for recording inventory and equipment asset transfers, sharing of manufacturing data across multiple players, and tracking receipts and purchase orders. The main advantage of blockchain is its transparency and enhanced security, as data is encrypted, making it impossible for hackers to alter transaction data on a single record without having to modify all records on the blockchain network.
Cloud-based Software
Cloud-based systems are one of the key driving technologies that enable the automation of warehouse ecosystems. Unlike in-house IT systems, cloud-based systems offer the advantage of not requiring any infrastructure, making them an attractive option for businesses. By leveraging cloud solutions, companies can-
- enhance automation potential
- control inventory, manage assets
- allocate additional resources for scaling up
- seamlessly integrate with other systems
- achieve centralized data accessibility to minimize human errors.
Conclusion
Automated inventory management solutions can provide significant benefits to businesses by enabling efficient control and tracking of business operations. With the inventory management software market expected to grow rapidly, especially due to the COVID-19 pandemic, it has become imperative for companies to adapt to new trends and leverage their benefits for maximum scalability, improved quality of delivery, complete visibility of inventory tracking, and accurate demand prediction.
By incorporating cutting-edge technologies like AI, IoT, Blockchain, and cloud-based solutions, businesses can streamline their daily processes, optimize and safeguard data sharing across the supply chain lifecycle, and facilitate analytics to promote business expansion. If you are looking for a solution to make your business more profitable and efficient, we are here to help.
