FOUR TRENDS IN
INVENTORY AND
WAREHOUSE
MANAGEMENT
Finding the perfect balance to improve response time and asset utilization
David Daffner, Vice President
Managed Services
If your business relies on physical products, then you already know how important proper inventory and warehouse management are. Gone are the days when you could manually keep track of daily operations with Excel documents. By now, you’ve no doubt made investments in scanners, mobile devices, radio frequency identification tags and automation to help reduce costs and increase productivity. Here’s what’s trending in inventory and warehouse management and what you can expect to see in the future.
- The Omnichannel Customer
Today’s consumer often browses product options on a mobile device, places an order online and then — depending on the items — picks up purchases in-store or has them shipped to their home or office. Providing this level of convenience in the customer journey is the new standard.
However, viewing sales from multiple channels makes inventory control more complex. Of course you want to avoid stockouts, but you also want to guard against overstocks. It’s been said U.S. retailers carry $1.43 in inventory for every $1.00 in sales. This means you need to find a sweet spot for maintaining a safety stock level and possibly add more distribution centers to your stock management and distribution systems too.
- More Personalized, Experiential Shopping
We’ve all had that experience at one time or another either in-store or online. The color or size of an item you’re looking for is out of stock or the quantity you need isn’t available. Real-time data and accurate forecasting are needed so you can meet demand and satisfy customers. Those same analytics can also help you create a more personalize experience with targeted offers that reflect purchase history and product suggestions.
Amazon estimates that 35 percent of all of its sales are generated through its recommendation engine.
No inventory? No problem. Imagine a retail setting with minimal products but maximum brand exposure that creates unique experiences shoppers can’t wait to share via social media? That’s experiential marketing, and Nordstrom is leading the way. Their Nordstrom Local stores will have eight dressing rooms but no inventory in stock for consumers to purchase. Personal stylists will curate outfits, and on-site tailoring will be available. Other online retailers like Bonobos and Warby Parker are embracing this trend by allowing shoppers to try on products in traditional mall settings.
- Smarter, High-tech Warehouses
The Warehouse Management System (WMS) has long been a cornerstone of most distribution operations. But today, thanks to automation, robotics, artificial intelligence and other technology advances, businesses have greater visibility and more integrated supply chains. In addition to moving products from manufacturer to warehouse and warehouse to retailer or end customer, the WMS gathers valuable information at every step in the process. This allows companies to analyze actionable data that can aid in decision making.
- Pick, Pack, Ship … and Return?
As noted by Logistics Management writer Bridget McCrea, warehouses are fulfilling smaller orders faster and having to contend with injecting last-minute orders into waving/batch picking and returning some goods (those that can be resold) to inventory. McCrea aptly notes, “These ‘new realities’ have made a sizable impact on the distribution environment and are pushing technology vendors to add better precision management capabilities into their systems.”
Evolving consumer preferences and expectations will continue to have an impact on operations, logistics and supply chains, which in turn effect the inventory and warehouse landscape too. Technology will continue to drive greater efficiencies and improve both speed and accuracy.
