If 2020 was the year that exposed businesses’ weaknesses, 2021 is the year when they are fortifying themselves and transforming those weaknesses into strengths. Improved inventory management is at the core of how many are accomplishing this feat. These are the top four inventory management trends that may prove vital to the success of your business in the coming year and beyond.
Local Sourcing Supply Chain Management
COVID-19 isn’t the sole cause of reshoring manufacturing jobs and decreasing the prevalence of international supply chains, but it certainly has contributed to the urgency of this trend. Many domestic companies have realized over the past decade that it’s not as profitable to import goods from other companies because of rising labor costs, transportation costs, and foreign infrastructure deficiencies. Add in the ability to perform complex inventory and manufacturing tasks in-house, and it’s a perfect recipe for shrinking supply chains.
Supply chain disruptions in China and other exporting powerhouses has led U.S.-based companies to rethink their supply chain strategies. Local, domestic vendors are proving to be more reliable and cost-effective than ever. In a year of uncertainty, companies have learned it’s best to diversify their supply chain options so they have something to fall back on when one gets cut off at a moment’s notice.
Rethinking Inventory Forecasting
The past is no longer a rock-solid predictor of future events. In the past, companies could use inventory management software to easily forecast seasonal trends in demand and spot other peaks and valleys in sales throughout the year. That way, they could plan their ordering strategies accordingly and always have the raw materials and finished goods they needed on hand to meet demand.
But we’re in uncharted territory now, which requires rethinking inventory forecasting. Gartner describes businesses’ pandemic response in three phases: Respond, Recover, and Renew.
Respond: This phase involves taking temporary measures to ensure safety and prevent immediate damage to a company.
Recover: Once the initial threat is dealt with, companies must take steps to reopen, rehire, and resupply.
Renew: Learning lessons from the first two phases allows companies to establish new policies and processes that will lead to long-term stability.
These three phases will obviously produce organizations that are much different than the way they used to operate. But it’s necessary to their success. You can’t trust that demand for your products will return to normal after the pandemic has run its course. Look at each product closely as things begin to open back up and see how they are faring. You may need to adjust your inventory levels of certain items up or down, or you may even have to discontinue some of them to remain competitive.
Automating Warehouse Processes
In warehouse management, the fewer touch points the better. Not only because it limits the potential of inadvertently spreading COVID-19, but because that is a great way to boost efficiency and customer satisfaction. You can automate the receiving process by using barcode scanners to scan in goods, reconcile orders, and instantly update your inventory records. You can also organize your warehouse to speed up both putaway and picking.
Batch picks enable warehouse workers to pick all of the items for multiple sales orders in a single trip around the warehouse. This saves time and speeds up order fulfillment significantly. And these are just some of the ways that businesses are automating their warehouse management, order management, and inventory management.
Needing Inventory Management Software
To make the above strategies work, small and medium-size businesses are turning to inventory management software. For most of them, a full ERP inventory system is out of their price range and not even necessary because they wouldn’t use half of the features in one. When it comes to managing supply chains, running in-depth reports to spot trends, and automating warehouse processes, inventory management software is an invaluable tool.
For an affordable price, SMB’s gain access to the same advanced features large corporations use. These features include barcode scanning, automatic reorder points, vendor and customer management, pricing rules, multi-location inventory tracking, and software integrations to eliminate double data entry.
Looking to the Future
The great thing about these four trends is that none of them have to be temporary fixes. They can continue to benefit businesses that adopt them far into the future, so starting them today will be a big boost both now and later. Fishbowl is the #1 inventory management software for QuickBooks, and it can help you overcome numerous challenges. Sign up for an online demo to see for yourself.