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How Inventory Financing Makes your Organization more Resilient

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How Inventory Financing Makes your Organization more Resilient

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The global supply-chain crisis taught the business world a hard lesson: the prevailing just-in-time procurement strategy can collapse when there are widespread supply shortages and shipping delays for critical parts and materials.

At the peak of the COVID-19 pandemic and in periodic spikes since, lockdowns in China caused port closures, slow movement of goods and higher freight costs. For companies that entirely depended on supply lines from affected areas, the disruption impacted  business sustainability.

Now, as the global economy rebounds from the depths of the crisis, many businesses are pivoting to a just-in-case model, incorporating stockpiles of critical parts and materials to better ride out future disruptions. This represents a tactical and seismic shift for many businesses.

The ongoing war in Ukraine—which has roiled energy markets and disrupted global access to Ukrainian and Russian grain commodities—is a clear reminder that the continued need to be laser-focused on supply chain resiliency is bigger than COVID-19. Preserving operational flexibility and access to critical inventories should be top of mind for business leaders, simply because no one can fully predict the next instance of volatility.

However, the just-in-case model,  can tie up vital working capital needed for expansion, growth and sustainability. In the fourth quarter of 2022,  U.S. business inventories, seasonally adjusted, were at the highest level in the past three decades, according to the U.S. Census Bureau.

Inventory financing solutions, which J.P. Morgan’s Trade and Working Capital team delivers to clients across sectors and industries, can help companies drive supply chain resiliency and business growth through: 

  • Optimized procurement for stronger purchasing power
  • Improved working capital and balance sheet ratios
  • Reduced carrying costs
  • Shortened Days Inventory Outstanding

As the current supply chain pinch eases and with consumer spending holding strong, now is the time for businesses to reassess their inventory management strategies to ensure readiness for the next period of market turbulence.

Anubhav Shrivastava is head of Trade & Working Capital for Commercial Banking at J.P. Morgan, where he leads a team responsible for helping clients access tailored financial solutions to manage their working capital, reduce cash conversion cycles and mitigate risk as they conduct business globally.

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Archives, Global Trade Daily, Software

Inventory Management Software Market is Projected to Hold US$ 6 Bn By 2032

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The Inventory Management Software Market is set to grow from its current market value of more than $3 billion to over $6 billion by 2032; as reported in the latest study by Global Market Insights, Inc.

Inventory Management Software Market is anticipated to grow through 2032 owing to its capability of empowering users to track the complete asset lifecycle from procurement to retirement. In addition, inventory management software offers several benefits, such as improved visibility, fewer errors and discrepancies, fewer stockouts, efficient operations, reliable inventory planning and forecasting, and the ability to add new sales channels easily.

Besides, with constantly increasing investments in the manufacturing sector, the firms are adopting inventory management software to improve production planning, enable multi-channel integration, and gain more visibility of profits and margins in line with reducing operational costs.

In addition, the key providers in the market are also seeking to strengthen their foothold in the marketplace by expanding their portfolios and entering valuable mergers and acquisitions. Citing an instance, in January 2023, Albertsons launched a new inventory management system across banner stores. This rollout was supported by Afresh, the fresh food technology firm, and will assist store teams to plan better for the fresh production of food items, reduce food waste, and gather valuable data through their software.

Overall, the inventory management software industry is segmented in terms of type, application, deployment model, organization size, end-use, and region.

Considering the type, the manually managed inventory system segment held over 30% market share in 2022. Since manually managed inventory systems process simple computations related to inventory management, and complex calculations depend largely on the formulas entered by users, they are being increasingly adopted by small businesses.

Based on application, the asset tracking application segment is anticipated to witness considerable growth through 2032, as it helps improve asset inventory accuracy while reducing asset auditing efforts. Asset tracking also helps in cost savings owing to unnecessary equipment losses, labor costs, and subsequent duplicate purchases.

By organization size, the SME segment held over 60% market share in 2022. SMEs can leverage modern inventory management software to streamline their storage and distribution operations and gain a competitive advantage, which will augment the market demand during the next decade.

Regionally, the North America inventory management software industry was valued at over USD 1 billion in 2022 and is anticipated to register notable gains through 2032. The regional growth can be attributed to the increasing popularity of omnichannel retailing and the rapidly expanding e-commerce industry. As per reports, the total sales from the e-commerce section in the USA was USD 959.5 billion in 2021, which increased by 18.3% from 2020’s sales volume of USD 811.6 billion.

ROI 3PL distribution chargers made4net “largely making compromises between the way a warehouse wants to work and the way the system allows the warehouse to work,” logistics gather business
Archives, Global Logistics, Global Trade Daily, Warehousing

Gather AI Launches Dashboard Inventory Actions at ProMat to Help Customers More Efficiently Resolve Inventory Discrepancies

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Founded in 2018, Pittsburgh-based Gather AI is now the first established company using drones to automate inventory monitoring processes for warehouse operators to decrease inventory costs, improve productivity and boost revenue.

 

With Gather AI’s solution, inventory drones can fly through a warehouse, photograph pallet locations, then compare the bar codes, text and images with the warehouse management system (WMS).
The Gather AI solution dashboard helps warehouse teams find and fix inventory exceptions. They can review a list of exceptions on their dashboard, scroll through each one, view the picture of the pallet location and determine what needs to happen next, including fixing the information in their WMS. All of this can be done at their desk instead of walking through their warehouse. The new inventory actions function allows teams to categorize specific actions to be taken and filter those to create their ‘to-do’ list.

 

Inventory actions help teams improve their productivity and track what’s been corrected so they know when an exception has been resolved. Gather AI’s product is deployed in warehouses across third-party logistics, retail distribution, manufacturing, food & beverage and health & beauty.

 

In 2022, Gather AI raised a $10M Series A, found 25,000 lost pallets for customers and scanned 8X more pallets than they did in 2021. Additionally, according to customer data, their solution is 15x faster than traditional cycle-counting processes.
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Archives, Global Logistics, Global Trade Daily, Uncategorized

Faster Inventory Replenishment Cycles Expected in 2023; Depot Space to Remain Tight and Operational Costs to Remain Elevated

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The holiday season, now at its peak, is going to trigger an early burn-out of inventories in the US, which resultantly will kickstart the inventory replenishment cycles a bit sooner than the supply chain and shipping industry predicted earlier this year. This would cause an increase in demand the export hubs as the US starts to work on balancing its order-to-inventory ratio, as discussed in a recent webinar hosted by Container xChange, the leading online container logistics platform for container trading and leasing globally. 

The webinar shed light on some of the pertinent challenges faced by the container logistics industry worldwide and discussed some of the market trends likely to appear in the industry.

Global trade is undergoing an opportune shift in supply chain reliance on China to newer emerging SE markets as the country tightens its zero covid policy and struggles with increasing labor costs amidst other market disruptions. Furthermore, China has grown out of the low-cost countries (LCC) label, which has made way for other southeast Asian countries like India, Singapore, Vietnam, and Malaysia to mark their presence into multinational companies’ long-term regional presence imperative.

Predicting how the trade volume shift might look like in 2023, Mr. Eric Johnson, Director at S&P Global and Senior Technology Editor at JOC.com said, “There is an evident drop in trade between China and the US and the UK, and one of the major trends that have caught the attention of the supply chain and shipping industry is that imports from China to the US and UK have gone down. However, import volume into the US as a whole from all regions hasn’t gone down at the same rate as from China specifically which strongly corroborates the trade shifting elsewhere.” 

Companies globally are focusing on creating regional alternatives to curb supply chain disruptions cropping up due to high labor costs, fresh lockdowns in the country and protests in the country. 

With the dramatic fall in consumer demand, and with more containers available, the spot rates on transpacific routes between some countries in East Asia and the US have dropped drastically as well.

The spot rate of a 40 ft container in the China-West Coast route fell by 20% to $2,361 in October. The typical premium rate a year back was $20,000. Across the Atlantic, shippers in the US have witnessed a 20% dip in ocean freight orders, and ocean carriers have cancelled half of their sailings to make sure that their vessel’s capacity matches the demand. 

One-way pickup charges for standard containers from China to North America are declining month on month since May 2022 from $1773 to $344 in October. (One-fifth of what it was in May) 

 One-way pickup charges from China to Europe declined from $2845 in January 2022, to $1726 in May 2022 and further to $910 in October  

 One-way pickup charges declined by 80% from $1773 in May to $344 in October over the past 6 months at the China-North America stretch, and a 47% decline on the China-to-Europe stretch 

China continues to see a fall in freight rates

According to Container xChange platform data, the average container prices and one-way leasing rates in October 2022 on Asia to the US East Coast and the West Coast were respectively 63% and 85% lower than the rates in October 2021. However, while the rates have dropped dramatically in 2022, if we compare them with the rates in October 2019 instead, the drop is not as surprising. 

“The supply chain is already in distress with a surplus of containers, maxed out depot space and an increase in blank sailings. The Zero covid strategy and the geopolitical and trade risks in China will further contribute to the drop in demand for containers in China.” said Christian Roeloffs, cofounder and CEO, of Container xChange.  

However, it also means that the demand will slowly stabilize and get closer to the level at which it was before the pandemic started. We also expect the capacity re-adjustments to continue. Especially in the Trans-Pacific Lane, the demand will continue to decline. In fact, by November end, West Coast spot rates might even drop below $2,000.” Christian added.

Container xChange’s data shows that not just has the price of the containers decreased but there also is a drastic decline in the pickup charges. The average one-way pickup (PU) rates for 40 ft HC boxes from China to the US have seen a steep decline since June 2022 from $2,109 in May to a surprising $606 in September.

supply chain

CAx (Container availability Index) * values are much higher than pre-pandemic – meaning that the inbound containers are significantly higher at the Chinese ports than the imported boxes this year as compared to 2019 (pre-pandemic) and since then. This indicates that there are not as many containers leaving the ports from China which is now obvious and evident considering the uncertainties looming onto the China shipping business. 

supply chain

Countries and businesses show candor towards minimizing dependence on linear supply chains

“We will continue to see efforts towards diversification of supply chain sourcing and manufacturing out of China. This is a long-term view, and it will need vision and strategy from companies looking for a more resilient supply chain. We will witness increased container volumes intra-Asia and more countries will emerge as potential alternatives like Vietnam, India and more. In such an environment where there will be tighter margins for freight forwarders and traders, the cost is going to be everything. Leaders will look for ways to efficiency and business sustenance.”

Comparing the container prices in the Southeast Asian countries with that of China, the container prices are considerably lower in Indonesia, Thailand, Malaysia, Singapore, Vietnam and India than that China which corroborates well with the SE countries being opted as China plus one alternative.

supply chain

Container xChange Platform Data

The concepts of “minimization of logistics risks” and “diversification of supply chain” are not new. Countries and businesses are working harder than ever to eliminate their supply chains’ excessive reliance on just one market. As part of a China plus one strategy, businesses are currently assessing and launching projects to test the waters by entering into fresh countries to meet their supply chain demands.

The speed of this diversification is actually closely correlated with the additional disruptions we will observe in China as a result of numerous variables, including the Zero COVID plan, additional production shutdowns, and escalating geopolitical tensions. If they happen more quickly, diversification will follow suit.

About Container xChange  

Container xChange is a technology company that offers a container trading and leasing platform, payment infrastructure and efficient operating systems to container logistic companies worldwide. Covering the entire transaction process of shipping containers starting with finding new partners to tracking containers and managing payments, xChange makes using 3rd party equipment as easy as booking a hotel. We are on a mission to simplify the logistics of global trade.  

Being one of the top ten logistics tech companies globally, xChange is fundamentally transforming thousands of processes involved in moving containers globally. xChange is trusted by more than 1000 container logistics companies including Kuehne+Nagel, Seaco or Sarjak that use our neutral online platform to remove friction and create economic opportunity.

 

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5 Ways Ecommerce Sellers Can Overcome the Top Inventory Management Challenges

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Inventory management can make or break an eCommerce business’ success.

With efficient inventory practices in place, eCommerce businesses can identify which and how much inventory to order at what time, helping to ensure smooth operations and happy customers. 

However, there are a number of factors involved in managing inventory properly, and if not executed correctly, they can pose major challenges for eCommerce businesses. The following factors all influence eCommerce inventory management and need to be paid attention to:

  1. Supplier relationships: Inefficient inventory management can lead to strained relationships with suppliers and cause your business to be moved to the bottom of your supplier’s priority list when they send the next batch of products.
  2.  Funding: Maintaining necessary cash flow is crucial in order to manage inventory. As the market continues to become more and more competitive, eCommerce sellers may struggle to raise capital that helps maintain inventory.
  3. Process automation: An increased reliance on manual processes increases the probability of errors in managing inventory.
  4. Data-backed insights: To make informed, data-driven decisions, you need to accurately forecast your inventory needs by tracking and crunching historical sales data.
  5. Volatile demand: You need to be able to inform your suppliers to increase or decrease the order quantity accurately to keep up with fluctuating demand. 

With this in mind, below are five ways to help you overcome the challenges associated with inventory management and set your eCommerce business up for success.

1. Maintaining relationships with suppliers

It will be difficult to keep up with the demands of your customers if you cannot restock your inventory as fast as it runs out.

This is where having a good relationship with your suppliers and manufacturers pays off. You need to be in their good books to be on top of their priority list.

Paying your suppliers timely, maintaining transparency, and establishing a personal rapport is crucial in strengthening your relationship with your supplier.

To ensure you are managing relationships with your suppliers as is necessary, consider using supplier management software. With such a tool, you can manage supplier payments, check invoice status in real-time, promote supplier self-service, and increase transparency.

2. Adopting revenue-based financing

Maintaining cash flow to keep up with operational expenses when scaling can be difficult for eCommerce sellers. One of the main reasons for this is that the financial requirements of eCommerce sellers depend on their revenue which, in turn, depends on multiple factors like seasonal demand, supply chain roadblocks, and so on.

This poses a potentially detrimental challenge to budding eCommerce sellers who have a promising business strategy but lack the necessary cash on hand to keep up. 

8fig, an eCommerce funding platform, can help solve this challenge by providing equity-free capital injections based on supply chain analysis. The platform helps sellers forecast their inventory’s lifecycle in the supply chain in order to help allocate funds accordingly. Based on a business’ projected needs and unique requirements, it can receive the appropriate funds to get over the hump, setting them up for rapid growth.

For example, Glitch Energy, an energy supplement brand, scaled to 7-figure revenue with the help of 8fig’s growth plan while retaining complete ownership.

3. Using AI-based automation and warehouse management

The warehouse marks the beginning of the fulfillment process. Proper warehouse management is important for many reasons, such as:

  1. Ensuring your inventory is updated.
  2. Reducing fulfillment mistakes and do-overs.

Now, global eCommerce sales are predicted to increase to $7.783 trillion by 2025 from $5.545 trillion in 2022. This increases the pressure on warehouse managers to keep up with the rising demand while ensuring smooth operations in warehousing processes.

Luckily, modern software tools help you automate the entire process. By leveraging data, artificial intelligence (AI) can guide robots to perform warehouse tasks with greater precision.

For instance, Newegg, an online computer store, has automated its warehouse to keep up with its increased customer demands while minimizing errors.

4. Leveraging predictive analytics for demand forecasting

Understanding parameters such as current product demand, customer segments, and product categories, among others, will help you map which products need restocking. This can be done using predictive analytics.

The roadblock here for budding eCommerce businesses is that they might not know where to begin or what data to track.

Here too, there is software that can help. In this case, Glew, an eCommerce analytics software, would be a great option. Its platform will help you track over 300 KPIs (including inventory analytics KPIs such as inventory velocity, sell-through rate, depletion days, holding cost, etc.) on a custom dashboard, helping you optimize your inventory better.

5. Planning inventory to stay on top of the demand curve

Just like many other facets of an eCommerce business (such as website traffic, conversions, etc.), inventory also needs real-time monitoring. That’s because inventory changes with every order, and to give customers the right information about their desired product, it needs to be up-to-date.

But inventory planning can be tricky because it is connected with other eCommerce processes such as fulfillment, warehousing, and returns, among others. Those eCommerce processes deal with a mix of customers, suppliers, and delivery partners — the seller being at the center — making inventory planning complex.

In 2017, 34% of businesses shipped a product late because their inventory wasn’t accurately updated, and this continues to remain a challenge today. As of 2022, the ratio of inventory to sales is around 1.25, suggesting that there is still room for improvement.

One way to overcome this challenge is to invest in inventory management software that can help you stay on top of the demand curve. A great example is Mountain Top Leather, a company that makes quality leather goods, which increased sales by 91% after adopting the inventory management tool from ecomdash.

Conclusion

To recap, as an eCommerce seller, you will likely encounter many inventory management challenges with regards to:

  1. Maintaining healthy relationships with suppliers
  2. Securing adequate funding
  3. Automation of warehouse
  4. Leveraging data for market analysis
  5. Updating inventory as per demand

Fortunately, you can overcome these challenges by using the right services and software as we have explained above.

We hope this article assists you in taking the right steps towards better eCommerce inventory management.

 

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Archives, Education, Global Trade Daily, Warehousing

How to Properly Manage Your Warehouse Overflow

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Most warehouse managers have to tackle warehouse overflow at least once in their careers.

For most, this is a cause of headache as finding extra storage space for items is anything but easy. But, for those managers that know what warehouse overflow will be like and prepare for it in a timely fashion, there isn’t much cause for concern. With this in mind, we will take a closer look at what can cause a sudden disturbance in your storage and how to manage your warehouse overflow properly.

Different ways to manage your warehouse overflow

A common myth is that a competent warehouse manager will never let their warehouse overflow. This, of course, has little basis in reality. The requirements of a warehouse are based on numerous factors, many of which are entirely outside the manager’s control.

What competent managers know to do is how to keep track of these factors and prepare their storage for a potential overflow. Even seemingly minor preparations can be of great help. So, ensure that you fully understand what warehouse overflow can entail if you wish to tackle it with relative ease.

Inventory control

Inventory control is a fairly broad term encompassing many warehouse management aspects. Everything from packing materials to storage availability, inventory reorders, and warehouse
bottlenecks is a part of inventory control. And if you are to manage your warehouse overflow, you need to be in complete control of them.

In most cases, warehouse overflow happens due to a sudden influx of goods that require storage. If the warehouse runs smoothly, this influx shouldn’t be much of a problem. Yes, there will be some extra work required. But if you managed to streamline the storage process, the overflow time shouldn’t be long or particularly bothersome. It is always worth analyzing your inventory control in due depth and outlining all the aspects in which you can improve it.
The better you control your inventory, the better you’ll be able to prepare for and handle warehouse overflow.

Inventory tracking

Inventory tracking is a vital part of inventory control and a common reason why warehouse managers fail at it. Namely, if you wish to have an optimized warehouse, it is paramount that you are fully aware of what you are storing and the information regarding the stored items.

While this may seem obvious, you’d be surprised how many warehouses still use outdated ways to deal with inventory tracking. A single sheet of paper outlining what’s stored and where is hardly sufficient for modern warehouse needs. Both you and your workers need to use modern tools to keep track of your inventory and update it as need be. Only by doing so can you properly stack your warehouse and prepare it for potential overflow.

Adding overflow locations

Ideally, your warehouse will have specific sections specially reserved for overflow. If you use the total capacity of your warehouse at all times, it can be difficult to rearrange your items quickly enough to handle the sudden overflow. But, if you limit your storage use and segment your warehouse according to storage needs, you will have a much easier time storing extra items. Use your data to outline your storage needs and devise a long-term plan to maximize storage efficiency.

Mitigate overflow before it happens

With proper inventory control and designated storage space, handling warehouse overflow shouldn’t be much of a problem. Nevertheless, you’d be wise to mitigate it before it ever
occurs. As we said, you will have difficulty meeting a warehouse manager who didn’t have to tackle warehouse overflow at some point. And all of them wished that they had mitigated the
problematic aspects of it before they ever occurred.

Setting up an inventory plan

You shouldn’t consider warehouse overflow a potential disaster you hope will never happen. Instead, it would be best to consider it part of your inventory plan. Every warehouse needs to have an inventory plan to keep track of if it wishes to function correctly. Only by doing so can you organize your workforce and focus on a more long-term goal for your warehouse. A good plan lets you set goals, track their performance, and outline potential issues.

Warehouse outsourcing

Even with ample preparations and proper inventory tracking, you may run out of space in your warehouse. After all, how much available space you have is based on the storage needs and your storage capacity. The problem is that the storage capacity is limited, while needs are not. Therefore, if you have no extra room in your warehouse, you must have a contingency plan in mind. One option is to sub-let storage space from a large company. But, this is usually
good for single use. For more long-term, you should consider talking with local storage providers and seeing if they can help you out. If you establish a long-term relationship with them, you can look to help each other out when need be.

Final thoughts

To manage your warehouse overflow, you need to have a good understanding of your company and the storage process. Therefore, don’t expect that it will be a one-and-done deal. Running a warehouse means learning from your mistakes. That is the only tried and true way to improve your company.

Author bio

Nathan Curtis worked as a warehouse manager and logistics consultant for over 20 years. He now focuses on writing helpful articles for websites like roadwaymoving.com and helping
people tackle their storage and transport problems.

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3pls, Archives, Education, Global Logistics, Global Trade Daily, Software, Technology

Using Inventory Management to Combat Supply Chain Disruptions

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  • Companies are turning to inventory management principles for help navigating supply chain disruptions.
  • Inventory management isn’t the same as supply chain management. But both are vital to the success of modern, competitive companies of all sizes.
  • If your goal is a smooth supply chain, start by honing your inventory management processes.Inventory management is one aspect of supply chain management, and though the terms are often used interchangeably, they refer to different concepts. To thoroughly understand the difference between inventory management and supply chain management, you must first examine and grasp the full scope of managing the supply chain.

For a business, a supply chain follows a product from the sourcing of raw materials to the delivery of the item to the end user. Consequently, supply chain management contains many different parts and elements, such as the logistics involved in transporting materials and products from point A to point B.

You can consider inventory management a subset of a greater supply chain network. Managing your inventory involves ordering, storing, and distributing products. When it is handled well, inventory management can have significant benefits for businesses. Conversely, poor inventory management decisions like over- or under-ordering can be not only expensive, but also devastating for the long-term health of a company. If a business doesn’t invest in understanding and implementing inventory management best practices, it will almost certainly experience far more supply chain disruptions. And in the current climate, the last thing any organization wants to experience is an uptick in supply chain issues and the resulting challenges.

Inventory Management Techniques to Overcome Supply Chain Problems
Currently, there are three major issues that have contributed to supply chain headaches. The one getting the most press is the global supply chain crisis related to the COVID-19 pandemic. Safety restrictions, labor shortages, and shutdowns have impacted suppliers along the chain worldwide. Some of these supply chains have experienced only temporary hiccups whereas others have yet
to bounce back from disruption and return to normalcy.
The second supply chain challenge involves Europe and the U.K. Brexit and other international business decisions have slowed down some supply chains. At the same time, these disruptions have made other supply chains more expensive.

The final stumbling block in the way of a smoother supply chain is the challenge of trying to meet environmental needs like emissions goals. This is still a puzzle for which companies around the world are seeking solutions.

However, the good news is that you and your company can overcome each of these supply chain disruptions by implementing a few proven, modern inventory management strategies:

1. Adopt automation, artificial intelligence, and machine learning.

Automation is an exceptional tool for streamlining inventory management. For example, warehouse automation can create efficiency by using cloud-based systems to direct robots in finding or delivering goods. This eliminates the need for people to track down and package items. Essentially, these robots can serve as assistants to human employees and help improve the overall speed of workflows throughout a business.
Automation software driven by AI and ML can also serve a secondary purpose in alleviating supply chain issues. The software can collect and parse data to make the supply chain more transparent as a whole.

2. Embrace emerging inventory control applications.

The more control you have over your inventory, the less disruption and stress you and your company will feel as a result of the larger supply chain. Achieving the necessary level of inventory control isn’t necessarily easy, but many companies are adopting inventory control methods, like the ABC analysis, to smooth out the process.
In an ABC analysis, all products are labeled as A, B, or C. A-level products have the highest demand or value. In contrast, C-level products sell slowly, resulting in infrequent counts. And B- level products fit somewhere in between.

Once products have been classified this way, inventory and supply chain managers can more efficiently determine whether to order replacement stock.

3. Use passive and active demand forecasting.

Knowing how much of a product to have on hand each quarter makes financial and logistical sense. Demand forecasting predicting the demand for a particular product can be difficult, which is why many people break it up into passive and active demand forecasting measures.

Active demand forecasting involves looking closely at what’s happening in the marketplace. It’s part intuition, part trend data, and part historical data (if historical data is available). Startup businesses tend to rely on active demand forecasting for guidance because they have little legacy data to examine. Passive demand forecasting leverages historical trends to predict future needs.

Companies can use either passive or active demand forecasting, or they may prefer a combination of the two.

4. Employ inventory and warehouse management software.

Walk into any organization with control over its inventory and successful supply chain management practices, and you’ll likely see a lot of technology. Warehouse management software has been a game-changer for ironing out the wrinkles of inventory management.

Most warehouse management systems capture large pools of data. They also show at a glance what’s occurring not only in the warehouse, but also at all points of the supply chain. This makes them invaluable in helping identify potential pain points and supply chain disruptions.

Warehouse management solutions have other advantages, too. Many integrate seamlessly with companies’ other systems, like customer relationship management software. That means when a
customer support representative answers a phone call, the representative can use warehouse management information to provide exceptional service.

Outmaneuvering every supply chain interference is impossible, especially when it comes to uncontrollable events like a global pandemic. Still, inventory management best practices and tools can take the sting out of disruptions. What could be better for companies that want to compete and grow?

About Burak Ciflikli 

Burak Ciflikli is the COO of Jotform, a popular online form builder that’s on a mission to make organizations more productive and people’s lives easier. This all-in-one data-collection solution is perfect for gathering, organizing, and analyzing important business information. With more than 15 million users worldwide, Jotform is a trusted global brand that’s growing every day.

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Archives, Global Logistics, Global Trade Daily, Warehousing

5 WAYS A LACK OF REAL-TIME INVENTORY VISIBILITY IS HURTING YOUR COMPANY

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If you’re not combining barcode scanning and data collection technology with your ERP software, you’re inevitably going to pay more in labor costs, excess inventory, and errors.

Real-time inventory data is increasingly seen as the lifeblood of eCommerce and omnichannel commerce initiatives. With customers demanding high levels of visibility into inventory status before, during, and after every transaction, companies have to know what’s in stock, what’s in transit, what’s being returned, and when they need to re-order.

Inventory has to be accurately tracked, or it can negatively impact warehouse operations, fulfillment, receiving, and customer service. However, according to some estimates, nearly half of small and midsize businesses don’t track inventory at all or use manual methods. A recent Zebra Technologies study found that nearly 40 percent of companies still aren’t using mobile computers or mobile barcode scanners.


 

Managing inventory without real-time barcode scanning is only going to get more difficult as companies expand their SKU count and increasingly process larger numbers of smaller orders that are typical of e-commerce and omnichannel operations. As the number of inventory mistakes increase, they can have a ripple effect across the entire business.

“When companies don’t have inventory visibility, it can cause various problems.”

– Brady Stevens, Project Manager at Global Shop Solutions

“For example, they may run out of product and not discover the problem until they’ve already completed an online sale. Now, they’re missing delivery deadlines and will likely have to follow up with customers and offer make-goods. It can lead to profit losses at best, and often leads to customer losses as well.”

NO BARCODING, NO VISIBILITY

Here’s an example of a typical scenario of a company using an ERP system without mobility or barcode scanning: A warehouse worker uses a paper document (i.e., picklist), which lets him know where to find specific products for an order. The worker picks all the parts (kitting) and then walks to a work station to confirm the job has been completed. After that, the order is ready to be shipped.

There are a number of things that can go wrong in this process without real-time visibility, and they all have a cost:

1. Unnecessary Labor Costs: Without using barcode scanners, there’s a lot of time wasted typing information into the computer when employees retrieve their picklists and then confirm that they have picked all of the necessary items to fulfill the order.

If there are mistakes, then at least some of that labor is duplicated as workers return to the bins to pick the right items and then re-key the order information. The longer it takes an employee to process a single order, the more employees you’ll need to keep up with increasing volumes. Scanning accelerates the data collection and entry process.

2. Data Entry Errors: Manual data entry always leads to errors. Once those errors are in your software systems, they create inventory inaccuracies and shipment mistakes that can be difficult to spot and correct. With barcode scanning, all of the data entry is automated and initiated by the barcode label; there’s no opportunity for mis-keying a SKU or item quantity.

3. Picking Errors: Picking errors can cost a company tens of thousands of dollars per year. In industries that handle more expensive goods, the cost can be even higher. Picking and putaway are rife with opportunities for mistakes – employees can inadvertently pick the wrong item, pick the wrong number of the right item, put inventory in the wrong location, or make data entry or counting errors during physical inventories.

Barcode scanning and mobile computing can eliminate most of these problems by providing real-time confirmations that the correct SKU has been picked and in the right quantity.

4. Excess Inventory: Without accurate inventory data, most companies over-compensate for their lack of visibility by increasing inventory. This is a costly investment, as it not only results in unnecessary purchases and higher inventory costs, but also an increase in obsolescence.

With extra inventory, there are also more write-offs and write-downs, which can cut into profitability.

5. Lack of Visibility: Knowing how much inventory you have and where it’s going doesn’t just affect your ability to ship accurately. Without accurate, real-time inventory data it’s almost impossible to determine key performance indicators (KPIs) like on-time shipments, perfect order percentages, out-of-stocks, etc. This data is necessary if you want to make any kind of performance improvements ― it helps create a baseline and makes it easier to identify problem areas in your inventory processes.

PERFECT YOUR INVENTORY MANAGEMENT

The data created through mobile barcode scanning can help determine where the bottlenecks are in your inventory management operations, as well as identify where mistakes are being made and how well you’re performing against your customer expectations and your own internal goals.

If you haven’t deployed mobile barcode scanning to help track and manage your inventory, you are likely absorbing unnecessary costs and risks created through wasted labor, excess inventory, and picking/shipping mistakes that can ultimately result in lost customers.

To learn more about how you can take advantage of the cost-saving benefits of barcode scanning with Global Shop Solutions, check out this webpage.

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Eric Sutter is a business development professional with more than 20 years of experience in barcoding, building solutions for asset tracking and warehouse management across a wide range of vertical markets. Sutter founded EMS Barcode Solutions on the premise that customers need more than data collection devices and software— they need solutions. By combining and integrating components such as mobile computers, software, labels, and ribbons with professional services, EMS delivers solutions that provide its customers with a tangible return on their investments.

logistics
Archives, Global Logistics, Global Trade Daily, Warehousing

Buying a New Warehouse: Tactics for Logistics Companies

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When launching a logistics company, the location of your warehouse is intrinsically linked to overall success. As well as the location, you need to decide whether to lease or buy a warehouse. Further, if you are looking to grow, you need to ensure that your location has the availability to do so. You will save a lot of time if you only have to run through these considerations once. Throughout this article, we will outline key considerations to make when buying a warehouse.

Workforce Availability

You will need a team to fulfill your work and having a qualified workforce will make your life easier. When you’re looking for a new warehouse, you will need to consider the demographic you’re moving into. For example, you won’t find success if you pick a warehouse in Silicon Valley because the demographic belongs to tech-savvy programmers. When you are hiring, you need to look out for areas with a large proportion of logistic businesses. You need to get a fine balance between availability and trade in the area. If you move into a business where demand for workers is high, you will find yourself competing against high salaries.


 

Rent Costs

The cost will be a critical factor in deciding where to buy a warehouse. After all, if you don’t have the available funds, you may be forced out of your desired location. In the US, warehouse rental costs are divided up per square foot (SF). The highest average prices at the moment are in San Francisco, CA, with $16.50 per SF. On the other end of the spectrum, Memphis, TN, comes in at only $2.56 per SF. Although the rental rates may be lower in some cities, you need to ensure you check state tax rates. You don’t want to be stung by hidden costs because you didn’t do your homework.

Insurance

Whether you rent or buy, you are putting valuable assets in the warehouse and you need insurance to protect them. Having insurance for your commercial property means that you are covered for unforeseen repairs, loss of income, damage, and operation expenses. Typically, you are looking at $17 to a month for the insurance. This may seem like a worthless investment in months where nothing happens, but as soon as it does, you will wish you had it.

Nearby Transportation Hubs

When choosing a location for your new warehouse, you need to make sure it’s close to transportation hubs. To do this, analyze your most significant point for receiving goods and align your site with this. For example, if your cargo typically arrives by air, you should position yourself closer to an airport. The closer you are to your nearest source of export, the higher demands you can come with and the easier it will be to manage drayage.

Traffic and Access

The main objective of logistics is being able to move cargo from A to B. If you don’t have the industry in the area, then your business will fail. You need to analyze all aspects of the local area including peak traffic times, average speed limits, typical traffic volume, road conditions, highway connectivity, and accessibility to highways. If these factors aren’t perfected in the area, you will end up paying more than you need to in fuel consumption.

Environmental Factors

As well as being close to significant export locations, you need to find a warehouse near to other suppliers. You will need to research the large local suppliers and take into account any supply chain partners.

As well as suppliers, you need to assess the environmental factors of the nearby areas. Is the area prone to natural disasters? Will you benefit from intense sunshine? Or are you in the middle of a flood zone? If you find any of these risks at your proposed site, you need to ensure that the building adheres to certain building requirements.

Starting up a logistics business takes a lot of time and patience. You need to decide what the most important location factors are and tick them off. There will always be criteria that you have to let slide. Make sure that you carry out your homework and consider all aspects of the location.

metaverse
Archives, Global Trade Daily, Special Reports

Metaverse: a new way for businesses to connect with consumers?

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Although not a new concept and with a long road ahead, the “Metaverse” is currently seen as the future of the Internet, which is why technology giants such as Meta, Google and Apple are competing to be number one in the race to dominate the metaverse.

Eva Martín, CEO at Tiendeo, a company that specializes in the digitalization of the retail sector, kicks off the debate with the following question: Are we facing a fleeting fad or a new world that is opening the doors to a powerful business model? By way of introduction, he invites us to ask ourselves what we think of the metaverse, to enter this world to find out how it is changing people’s lives, the opportunities it offers retailers and brands to connect with the consumer.

A whole new universe in the making

The Metaverse is a virtual space that we can connect to through devices such as virtual reality (VR) and augmented reality (AR) glasses or helmets and applications that offer the promise of an immersive experience that feels like we are there, interacting with other people and objects.

In this alternative world, everything will be possible through an avatar: buying goods and services, attending concerts, traveling, playing games, and even working. The amazing thing about this universe is that you can teleport from one experience to another without leaving your room. The development of the metaverse seeks to extend the real world into the virtual world by making everyday actions into a spectacle.

What makes the metaverse so appealing?

The great potential of this technology as a business model is what has led several companies to create their own “omniverses”. To be successful they must understand that the user ventures into the metaverse to escape from the real world, because it offers them the alluring possibility of creating their own personality, their own reality: to show themselves as they “feel” they really are, taking the user experience to another level. Brands have seen in the metaverse the opportunity to create that aspirational reality and self-expression that, many times, the user is not able to develop or transfer to his real and physical life.

This introduces a new form of interaction between consumers and brands through the D2A (direct-to-avatar) model where we will no longer buy clothes for ourselves, but for our representation in the metaverse. This opportunity to improve conversions through fully immersive shopping experiences also has other benefits. In this universe, there are no stock or store space limitations, and manufacturing these products does not require raw materials or workshops to create them, so the profit margin is much higher.

The challenge for companies will be to get people to carry out the bulk of their activities in this digital universe, just as we do in the physical world, giving rise to virtual marketplaces that already move large sums of money. This is not so far-fetched in an age where humans are already glued to technology, whether professionally, socially, or both, and it is speculated that by 2030 we will spend more time in the metaverse than in “real life”. As such, the desire to dominate the new virtual spaces reveals an eagerness to control the way people interact with each other.

The Metaverse at the forefront of the retail sector

The opportunities offered by the Metaverse are endless, especially in the field of commerce. Technology company Wildbytes estimates that in the next five years, 70% of major brands will have a presence in the Metaverse. By 2023 some companies are already promising to launch a new product while others are already looking at the possibility of creating malls, boutiques, and virtual stores where avatars will be able to buy NFT products and pay in cryptocurrencies.

The retail sector is one of the most heavily invested in the Metaverse. For example, Gucci has already started selling its own virtual clothing, the Gucci Virtual 25 trainers and H&M has recently launched its first virtual collection through Nintendo’s social simulation game Animal Crossing.

Ikea also uses AR technology in its App to allow customers to create their own spaces and see how furniture would look in the physical world using AR technology.

There are brands that go even further and have no hesitation about making a clear commitment to the Metaverse. This is the case for Nike, which has gone so far as to create its own virtual universe: Nikeland. A space that offers access to various sporting arenas, as well as a showroom where users can equip their avatars with Nike shoes to take part in competitions. The brand also uses it as a testing ground so that younger generations can experience its new products through avatars before purchasing them in real life.

In short, the metaverse revolution holds the promise of a digital experience in which the virtual world and the real world intertwine and merge under a single reality. It is now up to brands and retailers to find their place in it and explore its full potential.