Right-Sizing Inventory

managing inventory

The wild supply chain swings of the past four years have given managers plenty to consider when it comes to managing inventory. Where the just-in-time model ruled for decades, the pandemic proved its time was up. But when the pendulum swung hard in the other direction, companies faced expensive gluts of many goods. That leaves supply chain managers to figure out what the Goldilocks inventory level might look like.

While the pandemic has ended, disruptions continue due to multiple factors. For this reason, determining the right size inventory is no easy task, but one thing is certain: technology must be a key player in the equation. The first part of the technology necessary for managing inventory is a warehouse management system (WMS). While WMS has been around for many years, if you haven’t updated yours lately, it’s time. Today’s systems are efficient and capable of integrating with today’s tools for the most accurate inventory management. The latest models also offer customization that wasn’t available in the past, in particular, customization that can match your team members’ skill levels. For instance, if you’ve got an experienced associate who needs less verification than a new or temp employee, your WMS should be able to enable that scenario. This can help speed up operations while keeping accuracy high.

There’s also the fact that modern WMS systems can now provide detailed reports that go well beyond the analytics of the past. You can now expect reports to include SKU velocity, available volume on shelves, and a look at your carrying costs. Some providers layer this with a digital twin, allowing warehouse managers to visualize their inventory situation easily.

Another way that your WMS can help with inventory levels is through its ability to group your picking for improved density. There’s less travel involved, and with faster scanning and verification, you’re ensuring more accuracy in your inventory counts.

If you’re in the retail business, having software at the store end that complements the WMS on the back end is also essential. Some modern WMS systems will include inventory planning modules for brick-and-mortar stores that work seamlessly with the warehouse’s inventory management. But in other cases, you need to consider products like distributed order management (DOM), which helps feed crucial information to the WMS, such as shipment speed.

Modern data collection tools within the warehouse, which feed information up to the WMS, are essential, too. By capturing barcodes, the WMS knows where inventory is within the DC. It can then feed that information upstream to omnichannel software platforms. With enterprise-wide visibility, organizations can get much better numbers on managing inventory to meet demands in a timely fashion.

Today’s WMS systems also operate with ease of use in mind. Their screens are better, the ability to customize reports is easier, and simple instructions mean that end users can quickly gain insights on inventory and make changes as needed. This trickles down to the floor level, where associates can access what they need in simple formats. Inventory management will always be a puzzle, but taking advantage of updated tools can make it much more manageable.