Introduction to Inventory Visibility
Creating inventory visibility can be a complicated process. Inventory is often stored at many places throughout the supply chain, including the warehouse, shipment trucks, and on the shelf. The complexities of supply chains often make it difficult for businesses to employ accurate means for monitoring their inventory. It’s not uncommon for them to rely on approximations based on shipping invoices or outdated methods.
When managers take a blind eye to inventory management, they miss out on the cost-saving opportunities associated with complete inventory visibility. Implementing barcodes, radio frequency identification (RFID), or similar inventory tracking systems can provide your business with efficiencies that aren’t feasible with traditional inventory counting systems.
Benefits of Inventory Visibility
Improve Overall Efficiencies
Counting with RFID is approximately 25 times faster than barcode scanning. This speed leads to reduced costs and less disruption. RFID chips can be placed on products—no matter where they are in the product life cycle—allowing more accurate tracking and greater inventory visibility from start to finish. Easy product tracking lets managers see order anomalies as they occur and quickly adjust, saving time and money on future complications.
RFID provides computerized product management, so visibility is possible from anywhere, giving managers full control of inventory, even if it’s been outsourced or is in transit.
Appropriate Inventory Levels
One of the major inefficiencies that businesses face is improper inventory levels—both too little and too much can be costly. Excess inventory exposes businesses to greater opportunities for products to become lost, damaged, or become obsolete. It takes money to stock products with no immediate return on the investment in storage. Too little inventory prevents you from meeting customer demand, which will not only cost you the present sale but will also damage your brand’s reputation.
Improving your inventory visibility will empower you to keep the optimal level of inventory to prevent these expensive supply chain mistakes. Optimizing your inventory also ensures that your customers will always have access to the products they want.
Increase Market Responsiveness
Improved inventory visibility allows you to see market trends more clearly. When it’s obvious that more of your product is moving, you can quickly ramp up production to meet customer demand. Being a first mover on this increased demand provides you with a unique competitive advantage. On the flipside, if products are moving slower, reducing production can prevent excess inventory and save you wasted costs in the long run.
Resolve Unpredictable Scenarios
Although companies often outsource parts of their production, they cannot abdicate responsibility for inventory when it’s out of their hands. When meeting customer deadlines, a firm grasp on product timelines, even those being produced outside of your control, is crucial. To avoid embarrassing slip ups, RFID tracking and inventory visibility allow you to reduce the risk associated with outsourcing. You can monitor product whereabouts from your own firm. If a problem occurs, appropriate actions can be taken to resolve the issue—before it’s brought to the attention of your customer.
Improve Customer Relationships
Whether you’re providing products for other businesses or directly to consumers, you know the value of a good relationship. Inventory visibility bolsters these relationships by allowing you to provide products on time and have the appropriate inventory levels on hand. The ability to monitor trends in how inventory is moving means that you’ll always be able to meet customer demand. When customers are able to rely on your business, you’ll be able to develop a more loyal client base, which is always good for the bottom line.
Although implementing a system like RFID for greater inventory visibility can seem like a daunting task, the benefits outweigh the initial investment in time and money.