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Gather AI & Barrett Distribution on the Many Benefits of Drone-Powered Inventory Monitoring for Warehouses

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Gather AI & Barrett Distribution on the Many Benefits of Drone-Powered Inventory Monitoring for Warehouses

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According to Interact Analysis, an industry research firm, there will be 214,000 warehouses globally by 2027, up from 163,000 in 2021. Having accurate inventory is critical for these warehouses. Accurate inventory ensures that there are no unexpected shortages, shipments are fulfilled on time, and the warehouse space is fully utilized. 

Today having accurate inventory in a warehouse can be difficult because the industry is struggling with 49% annual labor turnover. Training and retaining talent that can follow warehouse processes is a challenge, and as a result, up to 10% of products are put away in the wrong location or the wrong product is picked for shipping. To check for inventory errors, warehouses have people go from pallet location to pallet location and manually compare what they find with what’s reported in their Warehouse Management System (WMS). This is time-consuming, labor-intensive, low value-add, and also affected by labor issues. 

Drone-powered inventory monitoring is one way for warehouses to address the inventory challenge. One vendor leading the charge is Gather AI, which is the first established company using drones to automate inventory monitoring processes for warehouse operators to optimize profitability. With the Gather AI solution, drones fly autonomously through a warehouse and photograph pallet locations. Machine learning algorithms read bar codes and text to compare what’s read with what’s in the WMS. This means employees no longer spend long, tedious hours doing manual inventory with forklifts, and there’s less likelihood of misplacing product (no overordering, no more delayed shipments, and more). The warehouse manager can view inventory data in real-time from a web dashboard and easily identify and fix inventory exceptions, even creating a to-do list for their teams. This process is up to 15 times faster than manual cycle counting, and drone-powered inventory monitoring can be applied to virtually any warehouse type. 

Now, let’s look at a specific use case. Gather AI customer, Barrett Distribution, provides customized 3PL, DTC e-commerce fulfillment, omni-channel distribution, comprehensive transportation management and retail compliance for clients across apparel & footwear, health & beauty, CPG, consumer electronics, food, candy, grocery, and automotive.

VP of Business Process Optimization, Jim Rapoza, shares in this interview how in his opinion, the Gather AI technology has been tremendous. They’ve seen significant inventory speed improvement, especially in very narrow aisles (VNAs) and are scanning 300 or so locations per flight hour in VNAs, resulting in 1800-2000 license plates per flight hour. This allows their team members to do more value-added activities like researching variances, auditing, and training to support operations. He says “We’ve also seen improvements in DPPM upwards of up to 70% in a highly accurate facility.”

SVP of Customer Solutions, Scott Hothem, in a recent webinar talked about how Barrett was able to differentiate using the Gather AI solution. On a tour leading a prospective client through a facility, the client was so interested in the drones, they spent 30 minutes watching it and discussing the benefits. Scott says that was a disruptive event, and they ended up winning the business. He says “Customers love to see things that are new and different. At the end of the day, it’s not only your people, but also new and interesting technology and how it’s going to benefit them.” 

Other real examples of how autonomous drones have improved inventory monitoring processes: They reduced one company’s full inventory collection time from 90 days to 2.5 days and WMS error rate from 11% to 3% in three months. One company saved $350K by improving putaway efficiency, and another doubled their sales in one year. 

Gather AI started with three Carnegie Mellon University students, Sankalp Arora, Daniel Maturana and Geetesh Dubey, who were studying robotics. As a part of their PhD research, they developed the world’s first guaranteed safe full-scale autonomous helicopter, funded by the Defense Advanced Research Projects Agency (DARPA) and tested it in FBI training grounds in Quantico. The helicopter could avoid obstacles, land itself, cover 10 kilometers in under three minutes, and build a beautiful 3D map of the environment. The drones were curious about landing zones, wires, openings in buildings, and moving assets. That’s when these three further realized drones are excellent data-gathering machines. Their project won the Howard Hughes award, AUVSI Xcellence award, and was nominated for the Collier Trophy. 

The three transferred their research and passion for making drones curious to co-found Gather AI in 2018. 

As you’re planning inventory monitoring activities for next year and beyond, keep drone-powered inventory monitoring in mind. Your employees, customers and partners will thank you. 

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Inventory Software to Simplify Processes: Timly 

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Inventory Software Simplifies the Process by Delegating It to Employees

Without modern inventory software, businesses often have to close for several days a year. Stocks are counted and documented for short periods of time instead of keeping track of inventory levels and consumables throughout the year. In times of remote work and cloud software, the classic, analogue inventory has fewer and fewer advantages.

Contemporary Inventory Management: App Instead of Slips of Paper

It is a laborious and inefficient process: the traditional filling out of paper lists during inventory to then manually transfer the collected data to Excel lists on the computer. It is no coincidence that for years we have been seeing more and more employees in warehouses and factory halls pointing a barcode scanner at packaging and equipment. Especially in production and trade, companies are increasingly turning to digital solutions.

However, it is not necessary to directly face all the challenges of Industry 4.0. Often, inventory software alone already brings about positive changes for the operational process. This is not only true for the retail and shipping sectors. Construction companies and service providers also benefit from digital inventory management. It provides a permanent overview of all vehicles, machines, IT equipment, furniture and consumables – from the warehouse to the remote workplaces to the workplaces of the employees.

It is worthwhile for companies of all sizes to distribute the inventory over several shoulders and to stretch it out over time. Inventory management software that runs on employees’ devices as well as on office computers organises this process – and prevents data loss due to hardware defects or short-term illness.

How Inventory Software Works: QR-Code for Object Identification

With inventory software, inventory officers can outsource parts of the process to employees. They know their equipment and vehicles. They often know better about raw material or machine parts than inventory assistants or external service providers.

An increasingly popular software for inventory management is Timly. The programme can be installed on the company’s own servers, but is usually purchased with secure cloud storage included. Company managers can activate access to the online inventory database for different employees. However, no user account is needed to enter inventory data, only an inventory invitation.

This is quickly sent in Timly, so that the inventory officer can fulfil his administrative role. Among other things, he or she can ask colleagues in the home office to enter their used company objects into the software or to confirm their continued use.

Generally, modern inventory programmes work with code labels on the inventory. In the past, these were often barcodes, but QR codes are becoming more and more popular. These can be easily scanned by smartphone and tablet, which takes you to the database entry of the inventory object. Depending on personal authorisation, information can be read or changed in this way.

Does Inventory Software Need Scanners and PCs?

Remote workers can be asked to scan their borrowed assets from home, not only for inventory purposes, but also to get an overview of the available company technology. This is possible without special hardware such as MDE devices; a common mobile device with a camera is sufficient.

But also warehouse workers, craftsmen or employees on assembly do not have to be equipped with MDE devices. For the inventory software, the normal company smartphone or work tablet equipped with the corresponding inventory app is sufficient.

Inventory software, such as Timly, ensures transparency in the company. Through a continuous inventory in real time, the administrative effort is reduced in total. In the end, this is worth money: having a centralised overview of the company inventory at all times reduces costs due to loss of materials and search efforts.

The compliance functions are also helpful: The integrated maintenance planner organises inspection intervals, maintenance documents and the scheduling of external service providers. Clear statistics on the age and performance of machines, vehicles, plants and equipment are generated.

A specialised, fee-based inventory software like Timly can be used flexibly and is adapted to the respective working environment and industry: User interface and database fields can be individually configured after purchase, and the competent inventory software team is available for additional software needs.

Better Than an Inventory Excel Template: Cloud-Based Software

Quite a few small and medium-sized companies still plan to store the data collected during inventory in Excel lists. They look for templates and hope that these will cover all the fields and topics that play a role in their everyday business. Unfortunately, inventorying with Excel quickly becomes confusing. Flexibility also suffers from a certain amount of data. In very large tables, employees easily look in the wrong cell and thus confuse dates, locations or status information.

With inventory software that works like Timly, on the other hand, you always know whether the target state of the inventory corresponds to the actual state. This transparency about inventory assets prevents equipment loss and downtime. Smart asset tracking software is key. The full overview of equipment, furniture and vehicles made possible by inventory software also includes being able, as a manager, to see which employees have already started their part of the inventory.

In the Timly Cloud, all inventory data is stored in such a way that authorised persons can access it from practically anywhere, instead of having to send and version an Excel spreadsheet.

Can Good Inventory Software Be Free?

Companies that have realised that an ordinary spreadsheet is not enough for stocktaking and perpetual inventory management are sometimes looking around for freeware stocktaking software. These do exist. They are usually bait offers where only rudimentary features can really be used “for free”.

Other free inventory programmes originate from the needs of individual companies and sectors and would have to be adapted at great expense to the needs of other companies. There are also numerous reports on efficient inventory software to be found on the internet.

Companies that prefer things to be uncomplicated and do not want to risk opportunity costs are better off opting directly for a fee-based solution where support and configuration are included in the scope of services. This type of software cost usually pays for itself after a short time which is why many businesses are already relying on innovative tools to help with their asset management.

Not only does employee satisfaction increase, but also occupational safety thanks to the maintenance planner functions that are included in comprehensive inventory software such as Timly.

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6 Inventory Management Tips for E-Commerce Subscription Boxes

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Subscription boxes offered online can be a viable business model, provided you can give the target market what it wants. Finding the items to stock an e-commerce subscription box with is more complex than it seems, but you can use various e-commerce inventory management strategies to ease the challenges.

1. Surprise People With the Contents of the E-Commerce Subscription Box

Many e-commerce subscription box companies build in flexibility by being upfront about how the contents vary. For example, you might promise they contain products from certain broad categories and tell beauty box subscribers they’ll always receive one item for their skin and another for their hair.

That approach frees you from the e-commerce inventory management challenges of having a minimum quantity of specific products. It also enables supplier diversification.

Plus, subscribers should appreciate being surprised but have accurate expectations about what they’ll receive. People may not always get items they love, but they’re prepared for that outcome.

2. Use Data Within Your E-Commerce Inventory Management Strategies

Data can be powerful for helping you improve the handling of e-commerce inventory management for your subscription boxes. Keeping track of metrics like how many customers you gain or lose per month can make it easier to stay on top of what you’ll need to keep the boxes stocked.

Adventuretown Toy Emporium is a Los Angeles-based toy store with a brick-and-mortar and online presence. It recently announced a customized subscription box tailored to kids aged 0–3. The company sources from 35 countries and puts one or two toys in each box.

People curate the boxes based on data from parents about whether their kids are meeting developmental milestones on time and the experiences the children had with previously received items. Those insights help the people filling the boxes choose relevant goods.

3. Sign Deals With Suppliers or Other Partners

Navigating the e-commerce subscription box landscape usually requires adhering to supplier minimums. That might mean you must buy in bulk from your box supplier. However, before placing an order, it’s better for businesses to see if they can request a sample. If boxes don’t assemble easily, it might not be worth it. Saving 5 seconds per box assembly can make teams more efficient and get products to customers quicker. 

Another possibility is to enter exclusive deals where an in-demand artist creates several box designs you’ll send out in a single month. That’s a great way to increase influencer traction as those personalities make their ever-popular unboxing videos. It also increases anticipation because people will wonder which designs they’ll get.

4. Be Honest About Slowdowns

Anything from bad weather to unexpected product shortages could make it more challenging to send subscription boxes on time. High demand can also increase problems. Even Amazon occasionally experiences them — during the 2021 Prime Days event, customers had to wait two weeks beyond the usual time frames to get an in-demand mini camera.

However, telling customers about any delays as soon as you learn about them is usually the preferable option to staying quiet. Besides informing them about slowdowns, be transparent about what you’re doing to solve them. Relatedly, admit which aspects are out of your control.

If necessary, create a dedicated part of your e-commerce subscription box website that provides the latest information as you get it. That could work better than sending out numerous emails customers may eventually overlook.

5. Provide Limited Choices When Feasible

Some subscription box companies let a restricted number of people choose between two offerings. Perhaps you have a snack subscription service and allow the first 1,000 customers to submit their preferences for either a salty or sweet treat from a particular brand. However, anyone who tries to do that too late will get whatever’s available.

Taking that approach should make it easier to engage with your supplier because you only need a minimum of 1,000 packages of each snack version. Beyond that, you have the flexibility to get whatever option is more reasonably priced, easier to source or has some other desirable characteristic.

However, customers typically like when you give them some options. This suggestion makes it easy to do that without putting too much strain on your supply chain. 

6. Specialize in Recurring Subscription Boxes

Company leaders often find it easier to source an e-commerce subscription box if the contents are somewhat consistent every month. Statistics from 2020 indicated people spent about $74 per month on food and meal kit subscriptions. If your subscription box is that type, you might allow people to choose a certain number of meals for a monthly rate. However, they need to select the ones they want so you can indicate when specific offerings sell out.

This strategy also works well if you have a well-established supply chain network in a particular region. You might sell a coffee subscription box and promise all recipients of February’s box will get an organic blend from a South American roaster. Mentioning that allows you to engage with all your suppliers on that continent to ensure they’ll collectively have enough products to fill the month’s boxes.

It’s also wise to encourage people to sign up for a minimum number of months and give them the option to renew. Knowing the precise number of people signed up to receive six months of a recurring subscription box makes it easier to figure out how to get adequate stock. Clarifying that people cannot cancel and restart their e-commerce subscription box plan at any time also makes inventory more manageable.

Set Up for Subscription Box Success

Managing subscription box inventory comes with specific challenges. However, planning thoroughly and following these suggestions will help you overcome obstacles.

Listen to your customers, too. If they love or dislike certain items, their feedback might be reason enough to prolong or end your relationship with particular suppliers.

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Archives, Global Logistics, Global Trade Daily

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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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.

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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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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.

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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. 

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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.

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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.