With 2022 coming to a close, eCommerce businesses are looking to review the most effective operational strategies to manage inventory in the new year.
This guide will share 8 best practices for managing inventory for multi-channel eCommerce businesses interested in using the latest technology to streamline processes to efficiently avoid errors and maximize profits.
But first, what is inventory management?
Inventory management tracks the operations of products in your inventory from suppliers to warehouses, to your customers in the supply chain to ensure that your product levels are healthy enough to keep the business running smoothly.
The goal of inventory management is to create an efficient process across all products sold in your store starting with the suppliers to your warehouses to your customers is done with accuracy and on time.
There are multiple areas of operations that should be considered in the process of inventory management as technology strengthens and our need for efficiency and accuracy becomes even more vital. Let’s dive in.
1. Implement an Inventory Management System
Inventory management systems are automated software solutions designed to track, organize, and store information about products and raw materials in an eCommerce organization’s inventory. By implementing an inventory management system in the workplace, companies can save time, improve accuracy, and reduce losses due to inventory mismanagement. Furthermore, this system will allow for more accurate forecasting and decision-making processes moving forward.
2. Automate Resource Allocation
Through the use of automation and AI, inventory allocation can be
made more efficient. Automation systems can provide reliable and accurate data used to intelligently forecast demand and allocate resources accordingly. By eliminating the need for manual labor, companies can save time, reduce costs, and decrease the likelihood of errors.
3. Integrate with eCommerce Platforms
Inventory should be integrated with eCommerce platforms like Shopify and BigCommerce to provide real-time updates on stock levels, pricing, and customer demand. When integrated properly, this information can improve the customer experience, while streamlining order management.
4. Embrace IoT Technology
The Internet of Things (IoT) is rapidly becoming an invaluable asset to any business with an extensive inventory network. Utilizing these IoT devices will enable companies to track inventory levels, monitor stock movements, and gather valuable data to monitor demand and improve accuracy.
5. Implement Replenishment Processes
To ensure inventory always remains at a healthy level, companies should implement automated replenishment processes. This will help to ensure demand is always met while avoiding costly overstocks or stockouts. Tools such as SKULab’s Velocity Reporting can give insight into past sales and suggest reordering targets.
6. Utilize Blockchain Technology
Blockchain technology can provide supply chain traceability and improved asset management. This can be used to monitor inventory throughout its various stages while ensuring data accuracy, security, and transparency.
7. Utilize Cloud-Based Solutions
Cloud-based solutions can provide a secure, centralized platform to store and manage inventory data. This can help ensure data accuracy and reduce the manual labor required for data entry. Furthermore, a cloud-based system will provide flexibility for businesses to scale as needed.
8. Increase Collaboration with Suppliers
Businesses should strive to cultivate meaningful relationships with their suppliers. By maintaining a close connection with suppliers, companies can ensure supplies are available on time, quality remains consistent, and unexpected disruptions are minimized.
With the advancements happening in technology, the ability to better manage inventory in 2023 will be improved by following any or all of these steps. Implementing these 8 steps can help to reduce manual labor, increase accuracy, and allow for better forecasting, decision-making processes, and resource allocation.