If 2020 was the year when businesses' weaknesses were exposed, 2022 will be the year when they strengthen themselves and turn those weaknesses into strengths. Many people are achieving this goal by improving their inventory management. The following are the top four inventory management trends that could be critical to your company's performance in the future year and beyond.
Supply Chain Management for Local Sourcing
COVID-19 isn't the only reason for reshoring manufacturing jobs and reducing the use of overseas supply chains, but it has undoubtedly accelerated the process. Because of increased labor expenses, shipping costs, and foreign infrastructure deficiencies, many domestic companies have recognized over the last decade that importing items from other companies are not as profitable as it once was. When you add in the ability to handle complicated inventory and manufacturing operations in-house, you've got a formula for supply chain shrinkage.
Supply chain disruptions in China and other exporting behemoths have caused American businesses to reconsider their supply chain plans. Domestic vendors have been shown to be more dependable and cost-effective than ever before. Companies have learned that in a year of uncertainty, it's better to diversify their supply chain alternatives so they have something to fall back on if one gets cut off at any time.
Reevaluating Inventory Forecasting
The past is no longer a reliable indicator of what will happen in the future. In the past, corporations could easily foresee seasonal trends in demand and recognize other peaks and valleys in sales throughout the year using manufacturing inventory software. They could then organize their ordering strategy appropriately, ensuring that they had enough raw materials and finished items on hand to meet demand.
However, we're now in uncharted terrain, necessitating a reassessment of inventory forecasting. Businesses' pandemic response is divided into three phases, according to Gartner: Respond, Recover, and Renew.
Respond: During this phase, temporary actions are taken to guarantee safety and prevent imminent damage to a business.
Recover: After dealing with the initial threat, businesses must take steps to reopen, rehire, and resupply.
Renew: Companies can use the lessons learned in the first two phases to create new policies and processes that will contribute to long-term stability.
These three phases will undoubtedly result in companies that are vastly different from those that existed previously. It is, nonetheless, crucial for their success. You can't assume that after the pandemic is over, demand for your products will return to normal. As things start to open up again, take a thorough look at each product to see how they're doing.
To be competitive, you may need to alter your inventory levels of some goods up or down, or even discontinue some of them.
Automating Warehouse Processes
The fewer contact points in warehouse management, the better. It is a terrific method to increase efficiency and customer happiness. Using barcode scanners to scan in items, reconcile orders, and instantaneously update your inventory data, you can automate the receiving process. You can also structure your warehouse to make putaway and picking go more quickly.
In a single trip through the warehouse, warehouse workers can pick all of the items for several sales orders using batch picks. This drastically reduces order fulfillment time and saves money. These are just a few examples of how companies are automating warehouse management, order management, and inventory management.
The Use of Inventory Management Software
Small and medium-sized enterprises are turning to manufacture inventory software to make the aforementioned ideas work. A full ERP is out of their pricing range for most of them, and it isn't even necessary because they wouldn't use half of the capabilities. Inventory management software is a crucial tool for monitoring supply chains, producing in-depth analysis to discover patterns, and automating warehouse activities.
SMBs may use the same advanced features that larger companies do for a fraction of the cost. Barcode scanning, automatically reorder points, vendor and customer administration, price regulations, multi-location inventory tracking, and software integrations to minimize double data entry are some of the features available.
The beauty of these four trends is that they don't have to be one-time fixes. They can help businesses for a long time if they are implemented, so getting started now will benefit you both now and later. NCS Suite is the number 1 inventory management software, and it can assist you in overcoming a variety of obstacles. Sign up for a demo to see for yourself!