How Automated Inventory Management Systems Enhance Business
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Nowadays it is so much harder for companies handling materials and ordering, managing supply chains and logistics, to operate business processes in a more profitable and less wasteful way. Business process automation has become a rescue for business owners and managers who would like to streamline their inventory operations such as managing stocks, predicting the demand, purchase orders, shipping. According to Forrester’s research, with automation software, businesses can optimize their operating expenditures by up to 90 percent.
If your goal is to reduce time spent on routine stock counts and tracking, increase profitability and efficiency, get real-time data and precise forecasts, maximize the scalability of your business, automated inventory management systems can make wonders.
Note: With automation software, businesses can optimize their operating expenditures up to 90%, according to Forrester’s research.
Before moving to the next section where we are going to formulate the main benefits and perks of automated inventory management, we have several questions for you.
- How many times has it happened that you wasted your valuable time and resources on under-optimized processes
- Do you find it difficult to keep up with your inventory manually?
- Have you experienced inaccurate counts that resulted in frustrated employees and customers?
- Is it hard to forecast inventory needs accurately?
- Are there issues and hassle with unsatisfied customers due to the time-consuming process of delivery or human errors?
- Does tracking inventory make you overwhelmed, distracting you from focusing on more business-oriented goals?
We know how it is important for you to optimize your inventory management in order to get real-time, efficient, and accurate solutions ensuring better customer service and demand. Let’s discover what values automated inventory control and management can provide for your business acceleration.
It’s high time for automated inventory management
Let’s summarize the above-mentioned information and articulate the definition of automated inventory management. So, automated inventory management stands for a technology-based process of inventory management and control within the supply chain allowing wholesalers and distributors to efficiently monitor the stock levels in real-time. With an automated inventory system, businesses can collect data and control it thanks to wireless communication between the centralized software applications and integrated smart things such as barcodes and scanners. In the United States, in 2019, extensive adoption of barcodes in tracking assets across supply chains caused an increase of the market share to 45 percent. Due to digitization across industries, companies feel high demand to shift their business paradigms toward cloud-based network infrastructures and SaaS-based inventory management software. The outcomes are obvious: advanced capabilities, reduced downtime, cost-efficiency, predictive maintenance, and fast 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 Global Market Insights report, by 2026, the inventory management software market is estimated to reach $5 billion. Among the reasons for the expected market growth is an increasing demand to streamline inventory management within the manufacturing sector and mitigate risks. Furthermore, inefficient inventory management affects business productivity and causes a demand for the IoT technologies (such as 5G, RFID), widespread adoption of mobile devices, and the growing popularity of e-commerce.
Key industry leaders are inclined to upgrade their inventory management software to reinforce their market positions. For instance, in 2018, Oracle initiated cloud-based advancements in warehouse management systems to eliminate inventory costs and enhance customer experience.
The worldwide outbreak of COVID-19 has influenced companies to eliminate human involvement in business processes, so more and more companies are expected to invest in advanced cutting-edge technologies and automation (RPA, cloud-based technologies, data analytics, artificial intelligence, IoT, Blockchain). Statista predicts the double increase of the warehouse automation market worldwide up to $27,2 billion by 2025.
How does automated inventory system work?
Most automated inventory systems are cloud-based solutions and for business owners that means that they do not need to maintain servers. Whether you are a retailer, a manufacturer, or a warehouse, advanced inventory management systems based in cloud foster the process of asset tracking and controlling stock and orders.
Automated inventory management systems provide plenty of possibilities when integrated with point-of-sale systems allowing them to automatically track and monitor in real-time the product position across the supply chain: whether it sells, in-store, or on the e-commerce platform. Such integration helps to get insights into all operations regarding turnover rates, promotion performance, and profit margins. Marketing teams can leverage these benefits to track sales on each channel and control underselling and overselling, evaluate each promotion performance to build more effective campaigns.
When the stock volume reaches the reorder point, automated reordering comes into play, generating a purchase order and preventing stockouts. Moreover, timely and accurate reorders can also prevent wasted time and money.
To better estimate future customer demands and trends, the system includes product cost analysis and forecasting features allowing to predict operating costs and maintenance expenses and forecast the future order management needs. With analyzed data, the system ensures enhancement of business performance by determining optimal ordering points, evaluating profit margins, and turnover rates.
Why should you invest in automated inventory management?
An automated inventory system provides businesses with multiple benefits. Below are the 5 main perks worth considering:
1. Time efficiency.
Traditional approaches toward inventory management and control are tedious and obsolete because they are based on analyzing data from multiple locations manually. Calculating stock levels, generating reports, and evaluating future turnover may turn out to be inaccurate and inefficient. With point-of-sale integration and demand forecasting systems, advanced automated solutions continually update the data and generate meaningful insights that result in time optimization. It is worth noting that saving hours of manual data entry can impact customer retention because it eliminates inventory issues.
2. Maximized scalability.
By implementing advanced software, businesses get much more capabilities to upgrade their products and scale out. Instead of involving more staff and spending more money on manual tracking and submitting purchase orders, companies can use the benefits of automated inventory systems to be certain that opening new warehouse locations will be profitable. Real-time inventory data integrated with other management systems ensure the accuracy of the business decisions for expansion.
3. Complete data visibility and accurate predictions.
Automated inventory management software provides retailers and manufacturers with accurate real-time data on the level of stock so that, in the case of inventory running out, the system ensures automatic stock replenishment. Furthermore, based on evaluating data trends from stocks, businesses can make much more accurate and comprehensive predictions and recommendations in terms of hiring, optimal reordering points, schedule shifts to meet anticipated demands, adjust goals, and consequently, boost sales.
4. Synchronization with e-commerce channels.
It is critical to continually monitor and control sales across all channels to have a 360-degree view and sync all the information. Whether it is an e-commerce platform, in-store sales, or phone orders, – all this data can be synchronized in one central location to generate reports to not get into the problem of underselling or overselling. This, in turn, will help save up and ensure a better customer experience.
5. Improved quality of delivery.
According to a study conducted by Harvard Business Review among 600 retail outlets in 29 counties, 72 percent of stock-outs were caused by incorrect in-store ordering and replenishing practices. Manual generation of demand forecasts turns out to be inaccurate, faulty ordering results in lost sales, insufficient stock in the warehouse leads to unsatisfied customers: all this ruin business reputation. With automated inventory control software, retailers, warehouses, and manufacturers are continually notified of the ordering demand and perform their tasks without delay which leads to reduced mistakes as well.
Latest trends in warehouse and inventory management automation
Warehouse and inventory management automation becomes increasingly popular since it offers the opportunity to grow the client base and increase visibility and streamline operations. The demand for automation growth is accelerated by the COVID-19 pandemic leading to the competitive landscape. So businesses need to adapt to new trends in order to transform their supply chain and logistics industries. The global warehouse automation market is forecasted to surpass $30 billion by 2026.
Let’s take a closer look at the latest tech trends in warehouse and inventory management automation which can significantly shift business paradigms and increase revenue.
1. The Internet of Things.
With IoT technology, businesses can get a holistic performance and automated tracking of all connected devices (drones, beacons, sensors, automated guided vehicles, automated mobile robots, and other inventory assets). IoT asset tracking can be applied in equipment management for constructions to eliminate loss and theft; logistics companies can leverage it to optimize fleet efficiency and improve on-time delivery; hospitals can get real-time visibility to medical devices and patients’ care.
IoT enables storing, sharing, and retrieving data. It connects and synchronizes all the devices in real-time. For instance, during transportation or while storing in the warehouse, temperature sensors help to monitor products and, if the temperature conditions do not comply with the requirements, they notify the system and adjust the temperature accordingly.
2. RFID Tagging.
RFID is a radio wave-based technology used to monitor inventory and gather all necessary data efficiently. Being a step towards workflow-efficient supply chain management, RFID tagging integrated with IoT allows 360-degree visibility and data extraction and tracking real-time product information.
3. Big data, AI, and Predictive Analytics.
For data-driven decisions, big data analytics is paired with IoT technology. In terms of connected logistics, data collected by IoT-enabled devices are transferred to AI systems allowing them to analyze the best course of action and make analytical predictions. With that said, IoT together with warehouse analytic software provides predictive models on trends, risk of failures, and maintenance requirements. With predictive analytics, warehouse executives are empowered with such opportunities as identifying market trends, shipment delays, inventory demand, pricing distortions, etc.
Blockchain is a decentralized and distributed database (ledger) allowing to hold the records of digital data in blocks that are linked with the help of cryptography. Therefore, blockchain makes data tamper-resistant providing security to transactions distributed across the network.
According to ResearchandMarkets forecasts the global blockchain supply chain market is estimated to increase from $253 million in 2020 to $3,272 million by 2026. Blockchain offers real value for manufacturers, logistics, and shipping companies since this technology allows for tracking products through every stage of the supply chain lifecycle.
Thanks to the record-keeping and proof-of-concept approach, blockchain technology help securely record the transfer of inventory and equipment assets, share manufacturing data between multiple players, track receipts, and purchase orders. The main benefit of blockchain lies in complete transparency and increased security since data is encrypted so that there is no possibility for hackers to change transaction data on one record because they would have to change all the records in a blockchain network.
5. Cloud-based software.
Being one of the driving technologies, cloud-based systems enable enhanced automation of the warehouse ecosystem. In contrast to in-house IT systems, cloud-based systems do not require infrastructure which makes them more attractive to businesses. With cloud solutions, companies can:
- Increase automation potential
- Control inventory and handle the largest assets
- Give more resources to scale up
- Easily integrate with other systems
- Minimize human errors with centralized data accessibility
With automated inventory management solutions, your business gains huge capabilities to control and track your business operations efficiently. The inventory management software market is anticipated to grow rapidly, especially due to the COVID-19 pandemic. Therefore, companies have to adapt to new trends and leverage their benefits to maximize scalability, improve the quality of delivery, gain complete visibility of inventory tracking, and accurately predict demands. Incorporating such tech trends as AI, IoT, Blockchain, and cloud-based solutions, businesses can streamline their daily processes, optimize and protect data sharing across the supply chain lifecycle, facilitate analytics to promote business expansion.
If you are looking for the solution to make your business operate in a more profitable and efficient manner, let us know – we will provide you with top-notch professionals who will pick up the best tech option for your inventory management automation.