Inventory automation includes software and technologies that manage warehouse stock in real-time with minimum efforts and errors. It ensures a smoother performance of supply chain business processes by automating customer order deliveries; inventory demand fulfilment; tracking and management of real-time data important for warehouse operations; increased efficiency and increase in bottom line ROI. Automated inventory management systems are not only trendy features but are considered a constant necessity for companies which want to successfully survive today amidst challenging competition threatening every hour.
Gartner states that 91 per cent of companies are going digital today, 87 per cent of top management representatives are focusing on the necessity of digitalisation, and 51 per cent of successful digital transformation cases are prompted by market needs and necessities rather than by inner company wishes. Cloud computing and AI, robotics or IoT technologies, easy access to on-demand warehousing techniques, modernised tracking operations in real-time mode remove the challenges faced during manual inventory management and speed up the functioning of the complete supply chain.
According to FinanceOnline.com (a popular reviewer of financial products), data analysis, IoT and cloud computing are the three most popular automation technologies for tackling future challenges on inventory in 2023.
Types of automated inventory management systems for productivity optimisation
AGVs and AMRs
AGVs or Automated guided vehicles are software-based vehicles that conduct tasks in warehouses and other types of logistics centres as replacements of forklifts, conveyer systems or manual carts by travelling along pre-established paths through the use of radio waves, cameras, magnets, or lasers. Both AGVs and AMRs (mobile robots) help warehouse operators to collect products from decks and pallets and contribute in space saving.
While AGVs have been there since a long time, AMRS are newer on the block. With minimum onboard intelligence, AGVs need the help of wires, magnetic strips and sensors and have restricted movement as they have to follow these fixed routes, requiring additional cost and disruption to bring about any changes in future. AMRs are the new group of ‘collaborative robots’ using smart sensors and so they don’t rely on any fixed routes to move or navigate. They can also collaborate with a human worker for performing tasks.
Artificial intelligence
AI-powered inventory management systems identify large volumes of data, support in improved decision-making, reduced costs, eliminate risks, optimise warehouse functions leading to increased productivity.
One of their primary roles is data mining and converting them into cost-effective solutions. By monitoring, gathering, recording and processing the data and interests of every customer, AI helps companies in better customer understanding and they can better plan their strategies keeping in view the needs of the customers and stock products accordingly. AI can also streamline deliveries and transportation by using complex algorithms to calculate delivery time more accurately taking into account historical and real-time data and finding optimal routes to ensure timely arrival of orders.
As per available statistics, about 45.1 per cent companies in 2020 invested in automation of the warehouse and 40.1 per cent invested in AI solutions.
IBM, Amazon, Facebook, Microsoft, Nvidia, Tencet, Alphabet are the leading players that have leveraged AI benefits.
Cloud-based solutions
This technology allows all of the computer’s data to be stored at one place securely and be able to be accessed from anywhere which facilitates decision-makers to quickly respond and solve inventory issues. The multiple benefits of cloud-based solutions over on-the-spot applications include lower costs incurred as there are no hardware involved, faster implementation, regularly updated software and greater security and resilience. From the point of view of inventory management, centralisation of data enables a GPS-location project where one can track the movement of pallets, containers, delivery vehicles in real time to confirm when and how the items reach their final destination.
Cloud-based inventory management software can integrate with accounting and order management and help in inventory tracking till the SKU or bar code irrespective of whether items are kept in warehouses or they are in transit. The best inventory management software isn’t just compatible with cloud, but is mostly or entirely cloud-based.
IoT (Internet of Things) for smart warehouse operations
IoT is digital transformation of data management and tracking which has revolutionised every stage of the entire supply chain management process. It makes managing stocks, supplies more swift, efficient and accurate. Alibaba, DHL, Amazon are already deploying IoT enabled software for inventory optimisation. AI-powered devices collect information from different sources and analyse the data to improve the warehouse operations. They have the potential to automate the complete warehouse management operations.
Companies install IoT sensors to monitor the movement and use of material inside their premises. These sensors transmit real-time inventory information to the cloud and help end-customers have accurate real-time information about an item’s availability and the expected product delivery dates.
RFID Tags – Best example of IoT application in inventory management
Radio Frequency Identification or RFID are advanced 5G wireless data transmission technologies that support efficient and automated data collection and micro-tracking of the inventory management processes. The special attribute of RFID tags is that they can highlight which crucial package of the shipment needs to be opened first at the delivery point, besides of course assisting in providing accurate information on location, traffic, exact time of arrival of the package.
Manthan – Striding forth on the back of AI-powered inventory solutions
Manthan’s merchandise analytics solution automates buying, inventory planning, pricing and promotion. It helps in customer-centric assortment planning which personalises the assortment based on the preferred sales channels used by customers. Key assortment metrics like sales growth, gross margin and inventory turns are optimised by allocation and new product introduction. It also helps in demand forecasting, trends and sentiment analysis and attaining a profitable localised merchandise mix. The system works in real time to suggest retailers about the products to be dropped, retained, replaced or substituted apart from selecting products for markdown with ideal markdown rates, percentage and expected sales uplift. It further assists in deciding an optimal pricing for each product across all channels.
Future-focused retailing needs data-driven decision making and agility and flexibility in execution. Technology solutions like AI, IoT-based software help brands achieve 2-3x increase in sales by increasing accountability, minimising human errors and tracing real time data and analytics. The aforementioned new-age warehousing solutions make companies excel in this hypercompetitive environment with effective retail margin pressure balance.
