Stop Counting Your Inventory and Start Managing It

Stop Counting Your Inventory and Start Managing It

Stop Counting Your Inventory and Start Managing It

E-commerce growth has revealed unexpected inventory management challenges in many retail operations. These escalating issues have highlighted the importance of not only having a robust warehouse management system (WMS) in place, but making sure it’s seamlessly integrated with other key automation software.

Our recent On The Move webinar explored how inventory control, labor and order fulfillment can work together to increase profits and grow your business. In particular, we looked at how a fully integrated warehouse can help you to overcome significant roadblocks when life throws your business a curveball.

What’s Disrupting Today’s Inventory?

As global trade has increased the distance between manufacturers and destinations, it has also boosted the likelihood of shipping hiccups. As a result, five key market drivers are creating significant challenges that impact inventory:

  • Natural disasters — hurricanes, floods, wildfires, etc.
  • Clogged ports — labor challenges, ship sizes and closures
  • Component shortages — electronic components, vehicles, counterfeit goods and stockpiling in China
  • Container shortages — rising shipping costs, air cargo
  • Worker shortages — rising wages, high turnover and the need for training

These factors are strengthening the already-strong argument for distribution centers (DCs) to have integrated systems capable of responding quickly to ever-changing conditions. The faster DCs adjust, the faster they will lessen the impact of these challenges — saving money, increasing profits, and winning more business.

How to Combat Today’s Inventory Disruptions

While today’s market is presenting many new challenges — and intensifying old ones — there are also new tools and strategies that can keep your operation ahead of the game. Here are five that enable you to keep inventory issues under control:

  • Preparation — It’s one thing to have inventory. Knowing where that inventory is — and how much you have — is completely different. Getting a grip on how much you have and determining where it’s located are critical first steps.
  • Connection — From the moment a warehouse receives a pallet of goods to the time when a product is retrieved to fill an order and ultimately loaded onto a truck, multiple systems must work in concert to maximize profits and grow the business. However, many warehouses have built systems that struggle to communicate across functions. This limits upstream and downstream visibility and leads to inefficiencies. Connecting your software systems can make a difference.
  • Allocation — Knowing from where to pull inventory — and what labor is available — can mean the difference between satisfying critical shipping deadlines and dealing with angry customers.
  • Transportation — Manual label application and inefficient shipping methods are antiquated business practices. Moving more volume faster enables you to shrink shipping windows.
  • Realization — Satisfy or exceed customers’ expectations by ensuring they are not waiting for their items to arrive.

Integration in Action

Let’s look at a simple scenario that demonstrates how we can use these five strategies to combat today’s inventory disruptions.

In this example, a DC is receiving a shipment of dresses. The WMS verifies the product, quantity, quality and so on. Then it determines where the product needs to be sent. It might go directly to cross-docking, or be stored in the warehouse via any modality (RF, voice, etc.), automated storage and retrieval (AS/RS) or other system.

Thanks to our WMS, we now know how much product we have and where it should be stored. But how do we use that information?

By utilizing the connection between our WMS and warehouse execution system (WES), not only we can route inventory to the correct locations but also know exactly how many items are in each location. This will aid in the order fulfillment process as orders are received.

Now the WES is ready to fulfill orders through allocation, which means more than just identifying inventory locations to be pulled from. The WES determines the best routes, considers cycle times to fulfill orders, plus which tasks are already in the system to minimize congestion and get the orders shipped on time. We can also connect our labor management software (LMS) with the WES and WMS systems. By doing so, we can make labor determinations such as the number of people who will be needed for replenishment, manual picking, shipping and so on.

Once the order is completed, the WMS and WES communicate to identify the transportation route to the print and apply station as well as to the appropriate shipping lane.

Our entire software suite — the WMS, WES and LMS — worked together. Our inventory count is accurately tracked at every step and in sync across systems. Our dresses have been routed appropriately, labor has been deployed, and orders have been fulfilled. And because our software systems are connected, back-end operations like replenishment, cycle count, etc. are seamless and easily planned ahead of time.

We’ll never be able to stop a hurricane or create trade policies, but we can make our operations as efficient as possible by connecting them. In today’s supply chain, it isn’t enough to count your inventory; you must manage it. From the time you receive product until it reaches your customers, every action needs to be connected.

Where to Learn More

If you weren’t able to attend the live presentation of this webinar, you can still access the recording online to learn what to consider when choosing WMS software and get answers to common questions.

“Stop Counting Your Inventory, Start Managing It” is the third in a three-part On The Move webinar series titled Delivering the E-commerce Edge, featuring innovative solutions that industry leaders are already adopting to stay nimble, profitable and competitive. The first two webinars in the series, covering enhanced AS/RS and capacity planning with LMS, are also available on-demand.

To subscribe to our blog and receive exclusive communications and updates from Honeywell Intelligrated, click here.