For every plan A, there is a plan B, C, and beyond. Recurrent supply chain challenges such as material shortages and tariff changes have set the stage for diversification where businesses strive to differentiate resources across the supply chain. Studies have witnessed a 40% increase in companies with multi-sourced critical components, illustrating the supply chain’s effort to prevent stockouts and meet consumer demand. Instead of relying on one sole supplier, manufacturers now draw materials from multiple businesses, engaging with diverse distributors and logistic teams. Likewise, warehouses and retailers communicate with multiple manufacturers and shipping teams to preserve stock levels. A few benefits of proper diversification include, but are not limited to:
- Dependable business continuity amid challenges – Much like keeping a level of backup stock, diversification allows businesses to pull and modify resources from different manufacturers and suppliers.
- Flexibility in negotiating prices – By sourcing from different manufacturers, distributors and retailers can shift orders to stay within budget. The same can be said for manufacturers needing to rotate suppliers when nearshoring production.
- SKU Proliferation – Access to multiple suppliers and manufacturers allows businesses to provide a variety of similar products, maximizing offerings and expanding consumer reach.
- Maximized sustainability – In spreading out relationships, businesses can minimize their carbon footprint by selecting services closer to their customers. Moreover, diversified logistics help lower operational costs by shortening transportation distances.
To harness the numerous benefits of diversification, businesses must turn their attention to their inventory management system. Instead of tracking incoming pallets from one single source, shipping teams now monitor several sources throughout the supply chain to ensure proper traceability. With this in mind, let’s look at how inventory tracking adapts to the diversifying warehouse.
Empowering Inventory Management with Digitization
Gone are the days of just storing data on a paper-based system. Nowadays, inventory data is spread across various locations in the form of cloud-based systems, smart sensors, or handheld scanners used by pickers. However, the challenge lies in combining all these disparate sources of data into a coherent real-time view of every item, including boxes, pallets, and spare screws, across the world. Digitized inventory management often involves:
- An orchestrating Warehouse Management System – Cloud-based tracking software and WMS programs maximize data availability while empowering teams to update and view stock counts in real time. Simple tracking software helps in verifying ETAs and notifying replenishment needs for multiple sources within one user-friendly interface.
Related: See how digitized tracking facilitates Just-in-Case Inventory Management
- Embedded sensors strategically placed within your facility – Sensors are a game-changer when it comes to enhancing inventory management in modern warehouses. By monitoring entry points, quality checks, and storage aisles, businesses can capture real-time data on the movement of goods, temperature, humidity, and other crucial factors that impact inventory quality and shelf life. Sensors can also help identify and prevent potential issues such as misplaced items, stockouts, and overstocking.
- Intelligent RFID data capture – Setting a high standard for operational visibility, RFID technology has empowered diversification in the warehouse. With RFID scanning, businesses can track products accurately and in real-time the moment they arrive at the receiving dock. In-motion tracking further enables businesses to make informed decisions about their inventory with greater visibility into what products are selling. By knowing which products are popular and which ones are not, businesses can adjust their inventory accordingly, keeping only the products that sell to reduce storage costs.
Related: Check out 5 benefits RFID tracking is already bringing to the modern warehouse.
- Reliable connectivity networks – Wireless connectivity plays a crucial role in improving inventory tracking in modern warehouses. With the help of WiFi and cellular networks, businesses can leverage the power of real-time data and intelligent automation to optimize their inventory management processes. WiFi-enabled devices such as handheld scanners and RFID readers can capture data on the movement of goods and transmit it wirelessly to a cloud-based inventory management system. This in turn maximizes stock visibility and accurate cycle counts. Dependable connectivity also enables businesses to integrate more smart sensors and IoT devices without slowing down system performance. As a result, teams can capture and upload data from every corner of the warehouse to support a comprehensive view of inventory levels.
With the integration of intelligent inventory tracking, businesses can streamline visibility and minimize the risk of manual errors when dealing with multiple suppliers and manufacturers. By leveraging innovative technologies such as RFID or digitized reporting, businesses make more informed decisions to optimize their supply chain operations.
Questions to Ask Your Inventory Management System Before Upgrading
When evaluating new inventory tracking systems, our strategic team recommends asking the following questions:
- Where do blind spots happen the most? – This could be attributed to dead connectivity zones, manual tasks, or failing technologies. Either way, blind spots provide a concrete target for your optimization plan.
- Will a new system handle current and anticipated inventory volumes? – Consider seasonal fluctuations such as Peak Season when assessing implementation to make sure systems will handle high-demand workflows.
- Is your network infrastructure ready to accommodate more devices? – Meet with a specialized connectivity team to evaluate signal strength within your space, pinpoint challenges, and expand your infrastructure as needed before implementation.
- Do you already have a digitized database? – Manual data processing continues to permeate most warehouses due to its familiarity and apparent ease of implementation. However, teams relying on manual workflows miss out on real-time visibility and updates. Consider easing your team into a future-forward system by reducing reliance on manual systems with handheld scanners and mobile computing.
- How are compliance standards going to be monitored? – It is important to ensure that industry regulations and data security standards are met by implementing proper data encryption and access control measures. Digitized inventory tracking empowers teams to locate missed compliances and errors, preventing mass recalls and correcting workflows seamlessly.
As expected, the most successful tracking solutions are tailored to adapt to your unique business needs. With diversification trends expected to rise, modernizing your inventory tracking system is crucial to remain in step with today’s fast-paced supply chains. Contact our strategic specialists to learn how you can implement greater visibility in the Age of Diversification.