Revitalize your bottom line by improving your inventory management. Learn how IoT, telematics, and new cloud-based software can help at Fifth Third Bank.
Inventory management is key to improving profitability and getting real insight into a business. Yet, many small businesses are behind the times. One industry survey found that 11 percent of small businesses don’t even track inventory, while 44 percent tally inventory using spreadsheets or even on paper.
Fortunately, new technology—from GPS to computer learning and cloud computing—makes it possible for small businesses to manage their inventories more efficiently and with less cost.
Here are three tech trends helping to revamp inventory management.
IoT Automates Data Collection
The Internet of Things, or IoT, refers to the universe of devices that are connected to the internet. On the household front, IoT is already present in our daily lives. An internet-connected morning alarm can trigger the coffee maker and turn up the thermostat, for example.
But the most impactful applications for IoT lie in business. In the supply chain, there is an incredible amount of data that is being collected. According to Bain Insights Brief IoT business-to-business applications were on track to generate $300 billion by 2020.
Collecting data through IoT, such as smart barcodes and wireless scanners, makes it possible to automatically track product location and movement. Such rich data is a first step for identifying trends and implementing systems—such as through machine learning—that can optimize inventory management. That same data can be used to predict inventory needs and communicate with suppliers and transportation vendors well ahead of time to eliminate last-minute high-cost product shipments.
A major bicycling manufacturer, for example, put IoT sensors in the shipping bins transported between its distribution center and headquarters to provide real-time updates on the location and estimated arrival time of orders. Then, to automate inventory replenishments, it used IoT decals on bikes and rack sensors to detect movement.
Telematics Brings More Transparency to Transportation
Telematics is another tech trend that has real-life, real-time applications for modern inventory management. Telematics combines real-time transportation tracking and analytics, with implications for companies of all sizes. Ultimately, working with transportation solutions that use telematics can improve efficiency and reduce fuel shipping times and labor hours. Just as importantly, this data makes it easier to plan ahead—and in turn, negotiate better terms and lower freight costs.
For companies that have their own fleet of vehicles, fleet telematics can be a boost to the bottom line. According to a 2018 research paper from McKinsey & Company, “Telematic devices—which monitor and communicate location, fuel consumption, driver behavior, and other data—promise a range of additional benefits. Many organizations hope these technologies will help them improve the efficiency and effectiveness of their fleet operations and maximize the productivity of their drivers.”
Cloud-Based Software Tracks Inventory in Real Time
Having too much or too little product creates inefficiencies, drives up costs and ultimately impacts margins. How did Overstock.com become a retail phenomenon? The mismanagement of demand fluctuations.
Yet, many small businesses rely on spreadsheets—or worse, paper ledgers—to keep a tally on inventory. These methods can tell a business where it is today, but make no educated guesses about tomorrow’s demand.
Enter cloud-based inventory management software. These systems bring together all of the different components that go into managing inventory to offer a real-time view of how much inventory is in stock or available from suppliers. They can track supplier performance, look at past trends and automatically reorder product, to name a few key functions.
Coming up with a more complete picture
In its most simple terms, inventory management aims to have the right products available at the right time and the right price. Yet, improving it can have implications that go well beyond product supply and demand. By embracing smarter inventory management, small businesses can optimize everything from labor management and shipping costs to customer experience—and in the process get better insight into their business and control over future outcomes.