From mom and pop corner stores to the distribution warehouses of global retailers, businesses rely heavily on inventory management to achieve operational success. An inventory typically contains a retail or manufacturing company’s most valuable assets, thus it is critical to implement an inventory management system that runs smoothly. Some benefits of a well-managed inventory are lower storage costs, increased customer satisfaction, more sales, and reduced labor costs. If these issues are of interest to you, perhaps it is time to overhaul your inventory management system.
Moving On From Manhours
We have come a long way from Microsoft Excel printouts, clipboards, and pencils tucked behind our ears. The tedious and endless task of manually checking and rechecking stock and filing reports that are already out of date before they leave the warehouse is a headache that many business operators are happy to be rid of. Aside from being painfully slow, manual inventory management is also liable to human error. Mistakes such as missing items or doubling up on tallies may be minor on their own but add together to cost businesses in terms of efficiency and the bottom line.
The proliferation of Internet technology has allowed businesses to expand towards the global marketplace while concurrently enlisting new contributors to their supply chain. As a result, companies who want to stay competitive now require more specialized solutions that can deliver on-the-minute information and be scaled up to meet their growing needs. The numerous technological advancements in modern inventory management seek to fill this gap.
It is common knowledge to business owners that labor costs—which include wages, benefits, and applicable taxes—can account for up to 70 percent of business expenditure. While the push for a higher minimum wage and more employee benefits may be justified, it can prove a challenge for companies that are already struggling on the budget front. Even for companies with resources to spare, it is prudent to save on labor costs through automation. Automated systems use computer-based tracking and advanced tagging technology to log the status of items and manage the fulfillment of goods accurately. Best of all, businesses only have to pay a one-off cost during the set-up.
Being Inventive with Inventory
Emerging inventory management RFID technology is an example of an advanced tagging technology that is poised to be adopted across the inventory management industry. A Radio Frequency Identification (RFID) tag is a form of ‘smart barcode’ containing large amounts of data that can be shared with a reader device via radio waves. This data is then transferred by the reader device to an inventory management software that updates the inventory database and initiates further actions if required.
The two main types of RFID tags are passive and active. Passive RFID tags have no battery source of their own and are powered by the readers when within a certain proximity. This means that the passive tags have a shorter working range but a lower price point. Active RFID tags have their own onboard battery and can continuously broadcast data. These active tags are perfect for tracking large moveable assets such as machinery or vehicles.
Perhaps the most attractive perk of RFID technology is that it does not require line of sight to function. This means that it is possible to scan an RFID tag from a distance and in any orientation. Unlike traditional barcode scanning systems that still require workers to walk the warehouse floor, physically retrieve items, and manually scan them one by one, RFID technology allows an entire pallet of items to be recorded simply by rolling them within the range of a reader. By reducing the check-in and check-out times for inventory items from hours to mere seconds, the competence and capacity of warehouse operations are increased exponentially.
Another way that RFID tags can help expedite the inventory management process is in the locating of items. Perhaps you have a new employee or a sprawling warehouse complex with hundreds of thousands of items. By activating the relevant RFID tags through a mobile tracking device, employees can pinpoint the location of any item within their vicinity. Through speeding up such actions that are undertaken multiple times daily, businesses can free up the time of their workers and direct them to tasks that are more fulfilling and productive.
An additional benefit of using RFID technology is for those that are on the decision-making level. RFID inventory management collects information as an item moves through the distribution chain, improving transparency and providing information on patterns and performance. This digital information enables business managers to make astute decisions based on reliable real-time inventory data. From determining which products are most in-demand to remotely restocking retail shelves, big data analysis is invaluable for ambitious businesses.
As business strategies evolve across the modern global marketplace, companies need to maintain their partnerships with technology. Technology not only expands opportunities for supply and sales but also provides avenues for companies to improve their internal processes. In this time of business renewal, there is little room for error and unnecessary expenditure. Companies should subscribe their inventory to visibility, efficiency, and accuracy by implementing a smart inventory management system.