Top 6 Inventory Management Trends to Watch in 2021

Manual documentation of inventory is really a cliched task, isn’t it?

Who likes to note down all inventory-related data on paper and submit it to the inventory manager for approval?

Paying a handsome salary for just recording data is not a good idea either.

Additionally, you just can’t consider human efforts without considering human error, can you?

This traditional method of inventory management often leads to overstocking or stock outage scenarios, lost sales, unsatisfied customers, fewer profit margins, and many other things.

In fact, reliable reports cite that each year global retailers are losing trillions of dollars in revenue due to either out-of-the-stock or overstocking scenarios.

These circumstances call for advanced solutions focused on streamlining inventory management process-related challenges.

Industry giants and startups across the globe have started adopting cutting-edge solutions like inventory management tools to meet growing demand.

In fact, reliable sources cite that the inventory management software market size is expected to surpass USD 3.82 billion by 2028. Alongside developments, its awareness amongst organizations is more than ever.

However, before moving forward, let’s first understand what is inventory management and the four most common inventory types.

What Is Inventory Management?

The streamlined Inventory management process empowers organizations to have the right items on hand at the right time to meet customer demand while reducing cost and loss.

Organizations with streamlined inventory management practices always know how much stock to buy, and they keep a steady flow of raw materials, WIP items, and finished goods moving from manufacturer to consumer, dispatched goods across a variety of distribution channels.

But no one stays top of the game by resting on their laurels. Companies need to look for inventory management trends, understand the drivers behind them and determine whether it makes sense to be an early adopter — or let someone else work out the bugs.

What are Types of Inventories?

Raw materials: It includes both perishable as well as nonperishable materials, from sand, wood or wool, electric parts, to raw fruits, vegetables, grains, or meats used to make processed foods.

Work in progress: These goods are items that are not yet ready to sell, like glass sheets, window frames, fabric, or flour.

Ready-to-sell Goods: They are nothing but ready-to-sell items, such as a window, suit coat, electric gadgets, loaf of bread, etc. Finished goods may be either intermediate items headed for another manufacturer, such as fabric to a clothing maker or bread to a sandwich shop, or a consumer good destined for a retailer or direct-to-consumer (D2C) sale.

Maintenance, Repair & Operations: These items are needed to keep the production line running. Few tools that come under this are tools or spare parts, or consumables to get products to their destinations, like paint or packaging.

Every organization, especially those in inventory-intensive industries, like e-commerce, manufacturing, and retail & food, must avoid blocking more cash in inventory than necessary along with reducing waste and shrinkage. Successful companies accomplish this using inventory models.

Now that you understand what inventory management is, it’s time to dive deep into inventory management software.

What is Inventory Management Software?

Inventory management software empowers organizations to keep track of their inventory. Companies can share PDF or excel copies of your inventory reports and purchase orders in real-time.

It provides staff members with complete visibility over inventory management with a mobile app and automates your inventory management workflow. Moreover, they also get the functionality of notifications when your inventory reaches the threshold limit.

Now, that you have all basics clear, let’s dive deeper into trends!

6 Key Inventory Management Trends To Watch in 2022

Knowing the latest trends in the inventory management landscape is essential no matter what business you’re in.

Many of these trends are focused on helping companies assess where to invest resources, while others will get you more buy-in from stakeholders, better use of data, and a roadmap to growth.

Now, that you have all basics clear, let’s dive deeper into trends!

1. The Advent of Cloud-based Inventory Management Software

Cloud-based inventory management tools have been gaining significant prominence in recent years. This software is helping businesses worldwide to automate and evaluate product information for efficient demand-supply planning and improved financial management.

This type of software understands the pain points of today’s fast-paced business world and puts complete inventory information right at people’s fingertips.

The product also enables employees to generate automated stock reports, complete audits, perform stock takes, and access stock movement history in just a few minutes with a mobile phone or any other device.

Its automated capabilities also play a pivotal role in eliminating manual errors throughout the inventory lifecycle.

On this note, it is expected that cloud-based inventory management solutions will see increasing demand over the ensuing years.

2. The Increasing Demand for Barcode Scanning Systems

The ongoing COVID-19 pandemic has significantly impacted numerous business verticals across the globe.

During times like these, businesses are looking for solutions that meet their needs with less or zero contact.

This has accelerated the demand for QR-code scanning systems to track inventory movements across the complete supply chain.

The technology allows companies to process large amounts of items with any devices such as computers, mobile phones, and Point of Sales (POS) terminals.

In this way, the inventory management system provides an ideal way for business owners and consumers to manage their inventory in the COVID-19 pandemic.

3. Burgeoning Focus Towards Order Management

Over the past few years, order management has undergone a major transformation to accommodate process re-engineering in inventory management systems.

Consequently, the situation has led to an increase in the demand for an inventory management solutions for streamlining order management procedures.

The software helps companies to centralize their orders that are received from numerous vendors. It also enables them to efficiently manage their complete order processing cycle and deliver best-in-class customer support.

On this note, it is anticipated that inventory management software will record significant demand for streamlining order management procedures over the forthcoming years.

4. Growing Preference Towards Business Process Automation

In recent years, companies across the world prefer looking for business process automation for inventory management.

It enables companies to set up workflow rules to trigger specific actions without human intervention.

By automating rote inventory management tasks, employees can focus on more valuable projects, including those that promote growth and product quality improvement.

For example, companies can trigger automated alerts when a stock falls below a particular level. Besides, they can also set up automated purchases.

You won’t be at risk of an out-of-the-stock scenario, and the customer doesn’t have to wait for an order. Other examples include automating SKU mapping, order fetching, updating real-time shipping rates, and reorder notifications.

Business process automation can be significantly implemented for the automation warehouse processes. It focused on moving inventory into, around, and out of warehouses with minimal human involvement.

It takes a dual focus on digital and physical processes. At a basic level, warehouse automation leverages workflow automation and data analytics.

For instance, a warehouse management system that gathers information on the number of a given item that will ship in the next two days and automatically directs a worker to pick those items all at once to avoid repeat trips.

More advanced warehouse automation uses AI, cameras and sensors to help organizations and completes everything without human intervention.

Moving toward real-time analytics is the most reliable way for retailers to monitor changes in supply costs to recalculate stock levels and have knowledge about which suppliers aren’t up to the company’s standards.

5. The Introduction of Advanced Inventory Reporting & Analytics

Organizations across the world have started using real-time data analytics for inventory management to make better business decisions, develop a more customer-centric business model and reduce costs along with improving efficiency.

The data-driven approach allows organizations to make better demand forecasts, achieve just-in-time inventory replenishment and get and offer near-real-time updates on shipments are and when they’ll arrive at their destinations.

However, It is not enough to have access to a large volume of inventory-related data. Organizations need to view it as a resource and use it to stay competitive.

Best practices to become more data-driven include:

Collect data even if you’re not sure how you’ll use it now. Use mobile phones for data collection, add photos, annotations, or anything that comes while managing inventory. The more inputs you provide, the more accurate your eventual predictive analytics and reporting become.
Opt for software that has integration capabilities. Look for systems that can interconnect with your finance and accounting, ERP, order and customer management, and other core software.
All decisions should be based on data, with reports to back up assertions. Select the metrics, like logistics KPIs or supply chain KPIs, that matter to your company, and track them consistently.
All product companies can benefit from a deep dive into inventory management and controls.
Take actions based on insights discovered. Teams that work to analyze data and issue reports but never see any movement based on their efforts will become discouraged. For manufacturers, even data analytics can reveal suppliers that often fall short on quality or timeliness, production bottlenecks or inefficient warehouse layouts. Add some machine learning and you can start taking predictive actions.

6. The Advent of Cutting-edge Technologies for Predictive picking

In today’s world, big data technologies have significantly revolutionized several industries across the world, and inventory management is no exception.

In predictive picking, companies leverage unstructured data to predict behavior by recognizing interdependencies and patterns.

Predictive picking technologies can direct businesses to initiate fulfillments before an order has even been placed.

Success depends on compiling data, like advanced marketing campaigns, weather, and seasonality to predict customer orders with a high degree of accuracy.

To become successful in predictive picking companies requires a lot of data and powerful analytics tools.

But most manufacturers and retailers can start down the predictive path by analyzing historical data through customizable dashboards to spot demand surges for specific products, beyond the obvious like clothes demand on a black Friday.

Later, companies can use human intelligence to figure out why there was a spike and whether it’s expected to recur.

If so, organizations can have enough stock on hand and design a fulfillment process that reduces shipping times and touches. And that data can itself eventually feed into a predictive picking program.

Enhance Your Inventory Management System With Axonator!

I’m sure I have cleared out how important digital inventory management can be for an organization.

And to streamline and even grow operations, inventory managers need to increase their skill sets and gain new data analytics and forecasting capabilities.

That’s where Axonator, the no-code platform comes in.

Axonator helps you amass and analyze data so that you can embrace current trends, keep your profit margins strong and maintain a high level of service for your customers.

The Axonator inventory management offers a single, scalable, and real-time view of existing inventory and demand so you can grow sales, project margins, and improve customer satisfaction.

No matter what the circumstances are, Axonator can make your inventory management work better. Make your employees productive and provide customers with what they need, when they need it.

With Axonator inventory management software you can efficiently automate inventory management operations to avoid stock outages and overstock scenarios.
You can track existing inventory levels, orders, sales, deliveries, bills of materials, and other inventory-related documents in less than one minute.
Its cutting-edge features like barcode scanning systems, geo-tagging capabilities, business insights, report generation, etc. help businesses automate complex inventory management processes and solve all inventory management-related challenges.