7 Inventory Trends Shaping the Future of Business

The way you manage your inventory can seriously impact the chances of success of your business.

But here's the thing: What worked just fine until yesterday, these days is quickly becoming obsolete.

Look around you, your customers' behavior is changing, their preferences evolving, politics don't make sense and let's just not start on climate change.

So yes, the world where your business operates is definitely changing.

Would it make sense for your inventory management strategies to stay the same?

Not so much 

Hence, the need to know what's making inventory management more efficient nowadays

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Why Is Inventory Management Challenging Today?

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Yes, inventory management has never been something you can do with eyes closed, but at least you knew what would happen next. 

Right now?

Unpredictable is how you best define the situation.

Thanks to social media, demand levels can completely change overnight. Raw materials are becoming harder to find, making your purchasing decisions a new degree of chaos. 

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If we add to the mix global uncertainty and a rise in natural disasters, figuring out exactly how much stock you need to keep in store is far from easy.

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7 Trends Changing Inventory Management 

AI and Machine Learning 

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If you go into LinkedIn right now, there's a high chance you'll see more than half of the content discussing one thing or another related to AI.

Artificial intelligence has long stopped to be a temporary accessory to become part of daily lives, literally.

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For inventory management?

It means good news

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If, for example, you were relying on spreadsheets, feelings or past experiences to make decisions, now you can turn to AI to seriously determine what's going to happen next.

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Working with more data than you can imagine, artificial intelligence is capable of understanding patterns that you wouldn't be aware of  otherwise.

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And machine learning?

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Well, let's just say it's designed to learn from the data you feed to it.  The more information it has to work with, the more accurate its predictions are.

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How it's changing inventory management: 

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• Better forecasting: Yes, demand levels are becoming more and more complicated to understand, but if you take into account customer behavior, seasonal trends, weather and even social media favourites, you can actually predict what's going on.
• Smart reordering: Instead of setting static reorder points, AI adjusts them dynamically. If a product suddenly becomes popular, your system reacts right away.
• Cost optimization:  Keeping products beyond their utility life in your warehouse costs you money. Running out of critical items when you need them the most is also expensive in more than one way. AI shows you how to find the right balance.

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Robots in Your Warehouse 

Remember a while ago, when sci-fi movies showed us robots as that fictional very distant future of our reality?

Well, it wasn't that distant.

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Warehouses have always been a mess of people running around as fast as possible to picking, packaging or storing products. 

But right now?

Things are changing

Automated robots can pick and pack items faster than ever, helping you to do more with fewer mistakes and with fewer resources.

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How it's changing warehouses:

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• Faster order fulfillment: Automated picking and packing systems help you get products out the door fast. This comes really in handy, when you have customers that are waiting the best from your brand. 
• Accurate inventory:  The cool thing about working with robots? Besides the obvious, of course. They can keep track of your inventory levels with impressive precision.
• Lower operational costs:  Investing in robots might be pricey at the beginning, but in the long term it can help you save money tremendously.

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Cloud-Based Systems 

The way we work has changed. 

We can keep an eye on our work while doing other activities that matter for our personal lives.

Yes, and that includes managing your inventory.

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Cloud-based systems help you to have your inventory data stored in the cloud so you can access it whenever you need, from anywhere connected to the internet. 

Are you worried about the accuracy of your inventory data? 

No problem, cloud-based software makes updating or syncing data absolutely easy. Whether you're checking stock levels from your phone or syncing data across multiple warehouses, cloud systems give you that kind of flexibility.

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Cloud platforms update automatically and store everything securely.

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How cloud systems are changing inventory management

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• Access from anywhere:  You don't need to stay glued to your desk to be sure your inventory is running correctly. 
• Real-time updates: Like we said at the beginning, one of the biggest challenges inventory managers face these days is uncertainty. Knowing what happens, the moment it happens is fundamental.
• Integrations: Cloud systems are great because they are designed to work with your other digital tools, like accounting software or CRMs.

IoT and RFID

Going over your inventory takes time.

Sometimes way too much

The more stock you own, the more products you need to oversee. 

And when the busy season hits? 

Well,

That's when problems arise

So it makes sense to see the Internet of Things as the most popular trend for inventory management. 

Think of it as having a super smart computer inserted in a device that can communicate with other devices and work together for the benefit of your operations.

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RFID or radio frequency identification, for example, is amazing at showing you what's in stock, where it's located, and when it moves.

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How IoT and RFID are improving inventory management.

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• Real-time tracking: No more wondering about what's happening with your company's products. You can literally see where every tagged item is in your supply chain.
• Environmental monitoring: Ideal if you are dealing with items that need special care, like food. IoT sensors can alert you if the temperature or humidity goes out of range.
• Fewer chances of stockouts: Sensors are wonderful at letting you know when your stock hits a low threshold, so you can reorder before you face those dreadful stockouts.

Data Analytics 

Let's face it:

Nobody likes to spend hours staring at a spreadsheet full of data that makes zero sense.  

Data is only helpful if you can actually benefit from it. 

That's why more and more companies are leaning into data analytics to make all those chaotic numbers really relevant insights.

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With all the changes happening, inventory management needs to be four or five steps ahead in the future. Spotting patterns, predicting trends, and knowing with accuracy what's working or not is vital.

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Data analytics is a powerful approach to dig into sales history, supplier performance, turnover rates, and customer behavior, all so you can make better, faster decisions.

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How data analytics is helping inventory managers: 

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• Forecasting:  Take a step into the future of your business and industry by analyzing past trends, seasonality, and real-time sales, so you can plan inventory more accurately and reduce the guesswork.
• Better supplier management: Yes, that's right, with the right type of data at your disposal, you can better understand which suppliers are delivering late, so you can make the necessary adjustments.
• Reduced carrying costs: Data helps you strike that perfect balance: not too much inventory sitting around, not too little to meet demand.

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Sustainability

Do you want to know what's on people’s minds these days?

Besides politics?

Sustainability 

Your customers and their mothers want to know about the story behind your products. They not only need to be familiar with the process around your supply chain. They also need to know about your commitments to reduce waste or promote recycling.

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And no, it's not just because being eco-friendly is going to give you a boost in your brand's image.

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It's also because it's necessary; remember that climate change is part of our reality, so the more prepared you are, the better.

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How sustainability is improving inventories.

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• Lower waste levels:  Embracing sustainability means that you are fully aware of what you need to keep your operations running, so you don't incur unnecessary purchases, reducing the amount of overall waste. 
• Green packaging and logistics: From compostable materials to route optimization, there’s a growing push to reduce the environmental impact of deliveries.
• Resilience: And not only for your inventory, but for your whole business as well. Following sustainable practices gives you certain advantages, like having a backup plan in case your regular suppliers are affected by a natural disaster.

Multi-warehousing

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If you’re still running all your operations out of one central warehouse, this might be the year to start thinking bigger. Multiwarehousing is becoming a favorite among businesses that are seeking ways to distribute their product storage across a region, nation, or the whole world. 

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With customers expecting fast shipping, having your inventory split across different locations means you can get products to them quicker and cheaper.  And in case something goes wrong with one of your storage locations, you can simply move to the next. 

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How multi-warehousing is transforming inventory management

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• Faster Fulfillment: When your inventory is closer to your customers, you can deliver faster without paying a premium for express shipping.
• Risk reduction:  Just like we were saying, if one of your warehouses is hit by delays, weather, or supply issues, you’ve still got backups in place.
• Scalability: As your business grows, adding more warehouses helps you scale up without overwhelming a single location. You need however bear in mind that more warehouses might mean more expenses. 

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