The 4 best techniques to streamline inventory management
Effective inventory management is essential for helping a supply chain operate smoothly. However, even the most experienced logistics leaders don’t always know the best methods for achieving that goal. There’s no universal solution for guaranteed results, but certain approaches streamline inventory management better than others. Industrial journalist, Emily Newton suggests some to try.
1. Understand which supplies are most at risk
People must achieve excellent visibility of all the inventory needed for the products in their supply chain before seeing where problems might exist. Those tasked with making various efforts to streamline inventory management must also be sure not to overlook raw goods. It’s tempting to only consider the finished products. But, when in-demand items contain components like advanced electronics, they often also need materials that are not always easy to source.
Dramatic differences in how easy it is to source components and raw materials can also exist within products sharing the same broad category. Researchers explored how vulnerable gas-powered and hybrid vehicles are to supply chain issues and revealed some surprising findings.
Part of the investigation involved sourcing details of the more than 350,000 compounds needed to make seven vehicles. Each of those models had various levels of electrification. They then narrowed their focus to the 76 chemicals and the amounts in each car type.
The results showed hybrid vehicles faced more than twice the raw material supply chain risks as gas-powered alternatives. Materials for the batteries were among the biggest culprits. However, the researchers indicated automotive engineers could reduce the palladium and aluminum needed by changing the transmission and exhaust systems.
Inventory management is never simple, but it becomes an easier task when people are aware of which products or materials are most likely to experience supply chain strains. Then, they can use those insights to become more proactive and mitigate potential problems.
2. Deploy anti-counterfeit measures and protect intellectual property
People trying to streamline inventory management will inevitably encounter obstacles if they don’t take steps to keep counterfeit products out of their supply chains.
The best options vary according to the products manufacturers wish to protect. They could include laser engraving, microtags, RFID technology, and the blockchain, among many others. Serial numbers allow people to identify individual devices after manufacture and distribution. However, they often get rubbed off before criminals try to put the associated items in the supply chain.
The people tasked with reducing counterfeit items in the supply chain must evaluate various possibilities and select the ones that are most appropriate for their facilities and needs. It’s also wise to stay abreast of emerging technologies that are still in the research phase but may become viable later.
Protecting intellectual property is necessary, too. Some people cover printed circuit board designs with black epoxy potting compounds to do that. However, in this era of 3D printing, researchers at the University of Buffalo also recognised the need to stop someone from printing out products without the permission of their original creators.
Their solution examines the thermodynamic properties of 3D printer extruders to determine which machine printed them. Tests showed the creative approach could identify the source printer with a 92% accuracy rate.
Many manufacturers realise having an on-site 3D printer can help streamline inventory management. Instead of ordering a hard-to-find component for an essential machine, they can print one. However, if producers venture into printing proprietary pieces, they must tightly control when, where, and why such printing happens.
3. Investigate how robots might help
Robots can help streamline inventory management because they excel at repetitive tasks that could prove too strenuous for humans to perform for hours at a time. Some companies use autonomous mobile robots (AMRs) to move goods from one place to another in massive warehouses. Then, humans spend less time walking and can spend more segments of their shifts on tasks they find more rewarding.
One robot on the market can transfer up to 800 boxes per hour from trucks to conveyor belts. That’s about on par with what humans can achieve. The main difference is that robots can work continuously, while people need breaks. An executive from the company that makes the robot clarified that the goal with this robot isn’t to replace employees but to supplement them. He confirmed that humans could become an order of magnitude more efficient by working alongside the robots.
Such pairings could streamline inventory management by reducing delays that cause products to sit in unopened, unattended boxes for too long. When warehouses or similar facilities have too many goods that have arrived but remain unprocessed, inventory counts will more likely be inaccurate because they don’t contain all the products a company has available.
However, decision-makers must allow plenty of time to determine the best ways to implement the robots and let people get used to them without feeling overwhelmed. Even though engineers now build these machines with features that make them safe to work close to humans, it takes some people a while to get used to the idea.
4. Assess the pros and cons of storing vs. replenishment
Some warehouse leaders find it more challenging than expected to streamline inventory management because they keep too many products on hand. That can be a good thing if it’s virtually guaranteed the items will sell quickly. However, it’s not always easy to predict that. Customers’ tastes and needs change, often resulting in inventory that’s difficult or even impossible to move.
In one case study, business students assisted a company that counts Amazon and airports among its customers. The business historically kept lots of inventory on hand since decision-makers there believed that was one of the best ways to keep the clients happy. However, the organisation faced an all-too-common issue of running out of warehouse space.
The business students interviewed various stakeholders to get a better idea of the matter’s scope. They got details about production, product usage, demand, and more. The information allowed them to create and implement a methodology for setting inventory levels.
The associated framework the students made allowed people at the company to model different scenarios and determine the costs of keeping inventory on-site versus altering the manufacturing setup to produce more of what the business needed.
People in the middle of trying to improve inventory management often find they can’t view the situation objectively because they’re too close to it. Bringing in external parties worked well in this case because the individuals involved had fresh perspectives and were willing to get the necessary information before bringing suggestions to the table.
How will you streamline inventory management?
Making inventory management improvements is not always straightforward. It can also take significant time to get the desired results. However, the four tips here are excellent starting points that can put you on the right track.