How IoT is Reforming Inventory Management?

The Internet of Things (IoT) is leaving its imprint in diverse business sectors and has remarkably transformed the way they operate. It is combining the digital and physical world and forming a smarter and more responsive world around us. One of its biggest waves can be witnessed in Supply Chain Management and Inventory Tracking where it has not only helped cut-down cost and time but also paved the way for an efficient inventory management system.

But before we delve into how IoT is revolutionizing the different aspects of the supply chain, let us quickly understand the two terms- IoT and Inventory Management.

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What is IoT?

IoT can be defined as a giant network where countless physical devices, embedded with sensors and software, are connected to the Internet and exchange data with each other about how they are used and the environment they operate in. The sensors continuously pass on the data over the network about the working state of the devices. IoT enables the devices to share real-time data without human intervention.

What is Inventory Management?

Inventory Management is a process of tracking or managing your company’s inventory that involves buying, storing, and selling raw material and finished goods. Put simply, it’s about getting the right stock at the right place, right time, and right cost. Small and mid-sized enterprises generally use Excel and Spreadsheets to keep track of inventory databases and make sourcing decisions.

However, there are many challenges associated with a manual process that makes managing inventory a complicated task. This is where IoT comes into play and makes things easier.

Read: Supply Chain Reimagined: The Role of IoT and Blockchain

IoT in Inventory Management

A report by Wasp Barcode revealed that 43% of small businesses do not track their inventory and 53% of the same do not track their assets or apply a manual approach when needed. This reveals that a majority of small-scale businesses aren’t yet applying the best practices when it comes to inventory management.

But with emerging IoT technologies, the scenario is now changing. As for asset tracking, IoT sensors are boosting their potential and assisting to streamline the procedure of getting parts, products, and resources where and when they are needed. Also, with the assistance of IIoT and RFID, businesses can overcome the complexity bound with manual methods and monitor the inventory in real-time.

Here’s how IoT tends to improve the inventory management system on a global scale.

1. RFID in Inventory Tracking

For a long period, suppliers were dependent only on barcode scanning to track the movement of goods within factories and along the shipping routes. The conventional way of asset tracking is now becoming advanced with the arrival of IoT technologies, integrated with 5G Wireless Data transmission, such as Radio Frequency Identification (RFID) tagging and Cloud-based GPS systems. The use of such technologies enables micro-tracking in inventory management systems that would help monitor the item location in real-time at any point along the journey, thus eradicating the hurdles between scanning stations.

RFID tagging in IoT inventory management not only helps track the precise location of the shipment but takes some other factors into account as well such as traffic conditions, weather conditions, etc. to predict a nearly accurate time of arrival. It can also be employed to search specific items on a pallet shipment so the ones on the receiving side can unpack the most-needed items first. 

This can already be witnessed in delivery services where the product is scanned into the system, tracked during the transit, and later the delivery is marked.

2. Warehouse Management

Warehouse Management is all about organizing or controlling everything within the warehouse and to ensure it all operates in a smooth, efficient, and optimal manner. This comprises arranging the warehouse and its inventory, managing new stocks, improving warehouse performance, and more. A wide range of IoT applications have been put into use to turn warehouses into smart warehouses, such as-

2.1 Drones

Warehouse activities do possess some challenges for the staff. For instance, reaching a high shelf would still require a ladder that can, at times, cause injuries to the employees and result in low productivity. Drones, in such cases, can prove to be very useful.

With IoT connected inventory items and systems in the warehouse, the staff would be able to record the location of the item, and scan and monitor it in real-time. It is suggested to make a balance between drone use and the employees. A rotation policy would be better to avoid collisions with employees working in the daylight and leaving the night work to drones.

2.2 Robots and Automated Guided Vehicles

E-commerce giant Amazon has employed over 100k robot workers. Using robots and automated guided vehicles help measure the shortest route to an aisle and restock the inventory without any human supervision. This boosts warehouse productivity.

Apart from Drones and Robots, Blockchain and smart warehouse management systems are also utilized to enhance the inventory management system.

3. Anticipating Customers’ Needs

IoT inventory management can provide retailers with important data to identify the needs and desires of customers, beforehand. For example, when the stock goes low, the IoT sensors would bring this to the notice of sales managers. By obtaining demographics and some other important information, data analytics can estimate the number of products required at a retail outlet or distribution center. Sales managers can also obtain insights into the time or days when the sales count is at its peak, helping them predict future inventory demands. Although such information can be acquired even without the sensor technology, incorporating IoT streamlines inventory tracking and makes it more efficient.

Besides predicting customers’ needs, IoT sensor technology can be used to keep track of the consumption of resources such as gas, paper, and electricity. This helps enterprises cut-down their expenses and save costs.

Final Thoughts

With solutions like RFID for precise inventory tracking, real-time communication, touchless data collection, and smart warehouse management with the integration of drones and robots, an IoT-based inventory management system provides tons of benefits for organizations to embrace it. Although there are concerns or challenges regarding IoT implementation such as cost, security, and scalability, despite them, IoT Inventory Management continues to make progress and brings opportunities for advancement. This is swiftly becoming an efficient and cost-effective solution in this part of the supply chain management. There are huge upsides of this technology with some readily available industry solutions for businesses to stay competitive. It’s time you use this to your advantage and solve your inventory management challenges.

Looking to streamline your supply chain management operations? Reach out to us at info@dewsolutions.in or tell us your requirements here.