Online ordering and disruption of inventory availability bring new pressures to the supply chain
This article was originally published on Electronic Design.
With the influx of online ordering, disruption of inventory availability, and new environmental pressures brought on by the coronavirus pandemic, businesses across industries are taking a critical look at the health and maturity of their supply chains to ensure they can withstand both current and future demands.
Even businesses that once thought their operations were future-proof are finding areas of improvement—whether big or small—and investing to make a change. However, these investments needn’t all be done at once. The transformation journey can be built over time by identifying areas of improvement that will help an organization reach its desired goal.
To help guide this transformation, here are three best practices businesses should consider when looking to improve their supply chains:
1. Strengthen inventory visibility by building systems from the edge inward.
Consumer demand for fast delivery times and easy, real-time tracking methods has been heightened under current circumstances, putting further pressure on companies’ inventory visibility and management. Inventory is no longer just in the warehouse. It’s everywhere now, from trucks and trains to sorting facilities and delivery vehicles, making it increasingly difficult to track.
Businesses can promote inventory visibility across all areas of the supply chain by building on systems from the edge and working inward. The closer a business can get to the edge and connect it to a central system, the quicker and more accurately the business can capture information from the point of service. Using technologies such as beacons, RFID, sensors, and portals, companies can gather more data on their inventory and supply chain, leading to data-driven decisions and increased efficiencies across the entire operation.
2. Manage inventory with integrated systems.
At its core, better inventory management begins with understanding what the business is, what the flow of inventory is, and how to interact with and move inventory efficiently. Labor and real estate are often the biggest costs for businesses, so it’s imperative to understand what product is coming into the warehouse, where it should be placed, and why. Only then can organizations appropriately staff and maximize the space.
To make this near real-time management of inventory possible—and enable information to be captured, analyzed, and sent to the point of service—businesses need to ensure that systems are integrated and information is available from a centralized point. Businesses should leverage the power of advanced shipping notices and shipment validations, allowing for simplified and streamlined staffing and space allocation.
In warehouses and fulfillment centers across the country, companies are also equipping workers with forklift-mounted tablets, voice picking capabilities, and handheld barcode scanning that enable more efficient warehouse and shelf stocking. On the road, drivers use mobile devices to determine optimal routes, provide proof of delivery, and keep customers up to date on delivery times.
Many complexities are balanced when it comes to inventory management. This helps ensure that all systems and tools are working together, whether they’re associated with the warehouse or transport logistics, will make this balancing act simpler and more informed.
3. Improve inventory velocity with slotting optimization.
Inventory velocity is centered on the idea of moving a product through the supply chain fast and efficiently. Determining inventory velocity is one of the first steps a business can take to increase productivity and understand how products should be stored in the truck and on the shelf for maximum use of space. Each time a business can get one more shipment out in a load, efficiencies are created.
By utilizing slotting optimization, which leverages information and data from shipments and purchase orders to organize products in a warehouse or distribution center, businesses can understand what types of products are in a facility and how they’re typically ordered. This information can then be used to organize shipments in a way that more efficiently navigates workers to store, pick up, and move the product.
Slotting optimization can also help businesses determine which products are typically purchased together so that they can be near each other on a shelf. Similarly, this method can pinpoint fast-selling inventory, enabling it to get restocked quicker or in a greater quantity without reserving unnecessary shelf space or resources. Realizing the value of slotting optimization, backed by data, can dramatically help improve inventory velocity.
Improving Performance with Digital Technologies
Advances in digital technologies have enabled many companies to improve their supply-chain performance over time. Companies that develop a transformation roadmap with the vision of continuous innovation and improvement have the potential to unlock the full capability of their supply chains.
No matter where a business is in its supply chain transformation, these best practices can help businesses make better investment decisions that support operational goals—whether it’s getting to the edge, enabling better capture and usage of data, or future-proofing systems for more efficient integration.
Image via Electronic Design
