Smart inventory management is the solution for businesses scrambling to organize their workflows and eliminate inefficiencies. Companies across industries like manufacturing, logistics and supply chain, retail and more struggle with inventory management. If you have problems understanding how much inventory you have or don’t have, what can be optimized, and how to maximize the efficiency of your stock, you need to consider smart inventory solutions.
Let’s see how you can solve the current problems and boost revenues with advanced technologies and smart inventory management development services.
What is inventory management and why should it be smart?
Inventory can be described as a set of goods, equipment, and materials the company holds to produce more goods or services. It is integral for all business activities and it often serves as the means of revenue generation. Inventory can be classified and described in many ways, but at the end of the day, inventory management is vital for your capability to meet customer demand. Be it a local coffee shop or a large industrial facility, inventory management is critical for the continuous functioning of the business.
There are different types of inventory, and depending on the size of your organization, you will need to manage either several inventory types or all of them at once.
Keeping track of the data on raw materials, finished goods, safety stocks, components, and even packaging materials is essential for fulfilling the orders on time. It also helps to understand the purchasing trends and the timeframes for restocks. With that information, you can predict future purchasing, improve customer relations, control and manage cash flow, and avoid spending on wasted materials.
Measure, manage, forecast, cut redundancies: the benefits of smart inventory management
Smart inventory management is not just about management. If you want to step your smart inventory practices up, you will need a clear picture of your resources and capabilities. With that, you can not only react to the current problems but also prevent the potential issues and optimize your inventory to maximize profits.
Measure: how data analytics strengthens your understanding of the business
You cannot manage what you cannot measure, so it is critical to have a full scope of data pertaining to your inventory. A smart inventory system allows businesses to track most of their assets via the combination of smart tracking and data analytics. Knowing how much inventory you have, what is being used, what revenue it yields, and what is wasted gives you the opportunity to measure it. Smart inventory allows you to:
- Analyze real-time data – knowing the location of each piece of inventory, understanding whether there’s enough space in your warehouses, and how well your equipment performs gives you a strong edge when it comes to inventory smart management.
- Prevent outages and overstocking – knowing when and where to restock or free some storage space is vital for the efficient use of warehouses.
- Integrate with the existing solutions – most businesses already use certain ERP and CRM solutions, and a smart inventory system can be integrated with the existing ecosystem.
Measuring your inventory allows you to know exactly what is going on across your enterprise and react accordingly.
Manage: act upon insights to boost the efficiency of your business
Having all the information on your hands, you can make informed decisions to maximize the efficiency of your enterprise. That is where the benefits of the smart inventory begin to unfold:
- Increased efficiency – by understanding how efficiently the inventory is being used, you can manipulate it to maximize the value. You can reduce spending on redundancies, buy things you need the most, and allocate resources where they bring the most value.
- Early problem detection – real-time insights allow you to spot problems instantly. Instead of getting the inventory reports on a weekly or monthly basis, you can have all the data you need here and now and react to problems immediately.
- Reduce overhead costs – a smart inventory management system reduces your chances of losing the stock. For instance, some goods might expire over time, and it is unreasonable to overstock on perishable goods. Knowing where you lose money can help in reducing those leaks and allocate resources elsewhere.
Forecast: address inefficiencies and bottlenecks before they appear
One of the main goals of smart inventory service is to fulfill the increasing demand for your products or services. Having a grasp of your data analytics allows you to understand the trends and make predictions on the future trends. Will you meet customer demand in the next quarter or the next year using the same amount of inventory? With smart inventory solutions, you can see whether you need to make any adjustments in your practices.
Overall, smart inventory management system relies on four layers of data analytics:
- Descriptive: What is happening with the inventory right now?
- Diagnostic: Why do certain processes not yield expected results or are inefficient?
- Predictive: What are the future market trends, and when will the sales peak?
- Prescriptive: How to optimize the resources and inventory to maximize their efficiency?
Cut redundancies: avoid wasting money to make more of it
The most important benefit of smart inventory management is that it allows you to reduce the cost of operations. Inventory costs money when you buy it, when you use it, and even when you don’t use it, which is why you need to understand exactly how much of it you need. That is why you need to apply inventory analysis to gain a number of key benefits:
- Improve cash flow – analyze your inventory to identify items you sell the most to make timely reorders as well as the items you sell the least to avoid wasting money on slow-moving products.
- Reduce stockouts – see which items move the fastest to anticipate customer demand and avoid stockouts.
- Boost customer satisfaction – understand what types of goods your customers want and satisfy their needs.
- Cut wasted inventory – avoid wasting time, space, and money by cutting obsolete or unpopular products short.
- Reduce delays – learn more about your suppliers and plan your reorders accordingly to avoid late shipments.
- Improve pricing – plan your purchases and reorders to buy higher volumes of inventory and negotiate better deals.
- Expand your understanding of the business – review and analyze your inventory to gain insight into how your stock moves and how your customers behave.
Optimizing the use of inventory is the main objective of inventory management as the less inventory you have, the more money you have. Inventory smart management system frees up the funds to meet the customer demand.
Achieving optimal efficiency calls for the use of advanced technology. You need to keep up with the trends in smart inventory service yourself or find a reliable partner who can help you leverage frontier tech.
The role of advanced tech in inventory smart management
Technology fuels companies across verticals and changes the way you operate the business. Modern smart inventory solutions rely heavily on advanced tech that boosts the efficiency of the enterprise and optimizes the material flow. A number of technological solutions can be applied to improve inventory management.
Artificial intelligence and machine learning
Artificial intelligence (AI) and machine learning (ML) allow businesses to make effective decisions faster, automate processes, and find solutions to ongoing problems. Automation plays a critical role in the development of smart inventory system as it reduces manual work and human error, optimizes costs, streamlines inventory management, and enables informed decision making.
Computer vision and inventory tracking
Many companies adopt computer vision (CV) to address some of the critical challenges of inventory management:
- Inventory tracking – CV systems can help you track the inventory amount across the warehouses. If certain items or materials are running low, your employees will receive a notification that would alert them to refill the stocks. This feature can be combined with machine learning algorithms that would trigger an automated re-purchase order.
- Reducing human error – CV systems can help you track the materials with bar-code scanning.
- Detecting damaged materials – CV solutions know what the products look like in their default state and send alerts in case some of the items or materials are damaged.
Robotics and automated machinery
Robots equipped with vision cameras and radio-frequency identification do not just track the location of inventory, they can also move it around. In today’s smart warehouses, robots and automated machinery play a critical role in maximizing the efficiency of the facilities. Robots can be pre-programmed to follow certain routes or even navigate the space on their own thanks to sensors and vision cameras.
Advanced technologies like robotics, computer vision, and AI paired with data analytics allow businesses to take their inventory management to the next level. You can gather data from numerous sources, generate valuable insights, and then act upon those insights to boost business productivity. By eliminating bottlenecks and improving your material flow, streamline material management, save costs, and gain new opportunities.
How a reliable tech partner improves your smart inventory practices: the N-iX experience
Over the years, the N-iX team worked with numerous clients that required smart inventory service to optimize their performance. Together with our partners, we’ve developed a number of solutions that have already reshaped industries:
Real-time locating system for smart inventory tracking with Wirepas
Our partnership with Wirepas is one of the best examples of how wireless connectivity and real-time locating systems (RTLS) change the face of the manufacturing industry. The solution we’ve built together with Wirepas allows for the creation of high-precision RTLS for material flow tracking.
With the high-precision network of connected devices and the use of RTLS, the users can track their equipment across smart warehouses. This helps with the material flow optimization, cuts warehousing costs, and increases the efficiency of storage spaces.
High-precision RTLS for the industrial IoT company
Improving the quality of communications between departments and material flow between storages, production sites, assembly lines, and retails is critical for maximizing the company’s output. One of our clients (under NDA) needed an RTLS solution to address these challenges.
The wireless connectivity solutions used for RTLS allow for streamlined smart inventory and smart tracking, so that the operators have full control over the material flow. These solutions provide measurable value to the business:
- 21% lower error rate at the storage level;
- 27% cost saving as the business requires fewer vehicles and carriers;
- 10% increase in productivity thanks to process automation and optimization for higher material turnover.
Scalable big data analytics solution for Fortune 500 industrial supply company
Our client, a Fortune 500 industrial supply company (under NDA), offers over 1.6 in-stock products in such domains as metalworking, material handling, and safety. As a large-scale industrial supplier, our customer required a solution that allows for efficient management of large amounts of data, including inventory-related costs data. The N-iX team integrated more than 100 data sources into a single cloud-based data platform. As a result of our partnership, our client has improved the efficiency of both data and inventory management and unlocked the capabilities of predictive analytics.
Smart inventory management is an innovative way to leverage your assets using robust software solutions. This allows you to fill the ever-growing demand with less inventory. Full control over your inventory allows you to eliminate efficiency bottlenecks, synchronize the use of inventory across channels, and maximize profits.
Taking advantage of the benefits of smart inventory service is not that simple. It requires robust technology expertise and experience in leveraging the latest innovations. That is why you would need a reliable partner who can help you achieve the desired results fast and efficiently. N-iX offers a strong expertise across all the domains pertaining to inventory smart management to get your business a step up.