Efficient Inventory Management with Digitization

Since the start of the COVID-19 pandemic, the world has observed a profound transformation of the reality of business. We are witnessing a rapid digitization of organizational processes and a significant change in consumer habits. The growth of e-commerce is a sign of this transformation. The pandemic has triggered an extraordinary increase in demand for order volume. In 2021, e-commerce revenues are expected to account for over 18% of retail sales worldwide and is expected to be 22% by 2023. To keep up with rising consumer demand, the supply chain and logistics sector has been rapidly evolving with recent operational and technological breakthroughs. As order volume rises at an uncontrollable pace, there is a growing need for warehouses to enhance efficiency to the fullest.

Ongoing global supply chain disruptions have also resulted in companies switching from a just-in-time structure to maintaining significant inventory levels at warehouses. Inventory management has a lot of moving parts, and streamlining the process has proven to be a challenge for companies worldwide. Making intelligent choices with a company’s inventory is a challenge in today’s dynamic economy. Minute changes can largely influence margins. Due to this, future planning holds the key to operating an effective inventory management process. Additionally, there are certain underlying issues that need to be addressed in order to streamline inventory management.

Warehouse managers who are not getting a full picture of their complete inventory have led to significant problems, such as backorders and products going out of stock. With manual processes in place, it can be challenging to see when purchase orders may arrive or how much incoming inventory goes into safety stock. Standard operational procedures that are done without planning and regular revision can lead to mass inefficiencies. Lack of planning and inefficient warehouse workflow usually results in warehouses running into issues like failing to keep up with sudden surges in demand and high inventory shrinkage. Instances of underutilized assets—such as pallets, containers, and roll cages—or material-handling equipment—such as picking robots or forklifts—lead to large amounts of unforeseen costs being incurred in the long run. Due to constant volatility, streamlining warehouse workflow is proving to be imperative. The strategic planning of warehouse workflow coupled with available automation solutions would aid warehouse managers in ironing out inefficiencies.

Efficient inventory management is synonymous with implementing a well-planned Warehouse Management System (WMS). Warehouses and distribution centers need to maintain a rigorous management of their warehouse workflow and ensure a response without delays or failures in fulfilling orders or replenishing stock. This is where WMS platforms stand out. These software systems enable complete control of logistics operations in the warehouse through automated and intelligent processes from the point customer orders enter a warehouse until these orders are dispatched. Through process automation, WMS enables more efficient stock management as well as improved optimization of all available storage space. Tier 1 WMS providers like Oracle, Blue Yonder, Ehrhardt Partner Group, and Manhattan Associates have been able to facilitate digitization efforts in warehouses by equipping operators with the ability to augment their workflows with enhanced documentation and integration capabilities.

When combined with other technologies such as location intelligence solutions, WMS can also allow organizations to know the whereabouts of their orders and the movement of loads, robots, and equipment in real time. Other than traceability and visibility, these systems also allow monitoring of logistics performance of warehouse activities such as pick/pack efficiency and average fulfillment time of an order. Through data analytics and business intelligence tools, the systems assist managers in identifying potential inefficiencies and possible improvements that can be implemented to ensure more efficient and productive warehouse management. WMS platforms are known for their ease of integration, configuration, and usability. They can also be effortlessly integrated with other systems and enterprise resource planning platforms. This can enable WMS platforms to add further value to the digital footprint of large companies. Because WMS platforms are providing additional capabilities with increasing technological advancements, adoption of WMS for digitization and enhancement of existing inventory management processes will undoubtedly be a critical step for companies in the years to come.