Why Inventory Management Services Are Crucial for Supply Chain Success?

A manual inventory management system can lead to errors and cause delays in the order fulfillment process. Hence, most of the businesses today rely on professional inventory management service providers. They use advanced technology and optimize the inventory levels in the warehouse. This reduces costs and enables fast order fulfillment for the customers. Simultaneously, it allows businesses to focus on core activities like product development or exploiting new markets.

What Are Inventory Management Services?

A business uses professional Inventory management services to optimise the amount of stock available in the warehouse facility. These services ensure that the right amount of stock is always available in the warehouse to meet customer demand. Professional inventory management services include the following.

1. Real Time Tracking

It involves the use of barcode and RFID tags to track the exact quantities or location of the inventories. Real-time tracking tracks the actual stock levels and updates the accurate stock data. It enables a business to identify the products that are in high demand in the market.

2. Demand Forecasting

It involves the usage of AI or the study of market trends and sales data to forecast product demand in the market. It helps a business to prevent problems of overstocking and understocking.

3. Stock Replenishment Planning

It involves setting reorder points and safety stock levels so that the right amount of product in the right quantities is restocked inside the warehouse to meet customer demand.

4. Order Fulfillment and Coordination

It involves managing the entire order fulfillment process, right from picking the ordered product to packaging and shipping it to the customers. Proper coordination ensures that the right product reaches the customer on time and efficiently.

5. Reporting And Analytics

Detailed reporting and analytics provide an overview of sales trends and turnover rates of the business.

Why Are Inventory Management Services Important In The Supply Chain?

Inventory management services are important in the B2B supply chain for the following reasons.

• Effective inventory management services ensure that the right amount of products is always available in the warehouse for fulfilling the order fulfillment process. This enhances customer satisfaction and improves brand reputation in the market.
• It improves cash flow and allows businesses to focus on core areas like product development and exploring new markets.
• When a business expands, it becomes challenging to manage a lot of inventory. Professional inventory management services use advanced technology like automation and manage a large amount of inventory efficiently.
• It provides real-time visibility across the entire supply chain.

How Do Inventory Management Service Providers Work?

Inventory management service providers are specialised 3PL companies that help a business to optimise the stock level inside the warehouse. Here is a step-by-step guide on the working of inventory management service providers.

1. Initial Assessment

The inventory management service provider first inspects the existing inventory processes of the business, along with the warehouse layout. The provider even analyses the sales patterns and customer demand of the products properly.

2. Inventory Management System

The provider implements advanced software called the inventory management system, which integrates with the existing system of the business.

3. Real-Time Inventory Tracking

The inventory management service provider uses barcode scanning, RFID tags, and IOT sensors for tracking inventory stored in the warehouse. The software records each product movement right from storage to every movement inside the warehouse.

4. Use Data Analytics

The service providers use AI and machine learning to forecast product demand. They even automate the reordering process before the inventory gets out of stock in the storage facility. They even generate detailed reports about the inventories to optimize the inventory level and order fulfillment processes of the business.

Benefits Of Partnering With The Professional Inventory Management Service Providers

There are various benefits of partnering with professional inventory management service providers.

• It automates the inventory management processes and reduces labour and storage costs of the business.
• It improves visibility of the products stored inside the warehouse and avoids the problem of overstocking and out-of-stock issues.
• Automating various processes reduces manual error and makes order fulfillment faster.
• The service providers provide detailed reports about stock movement in the warehouse. This allows a business to identify the slow-moving or high-moving products in the warehouse and take strategic decisions.

Common Challenges In Inventory Management

Effective inventory management is quite important for a business. But it comes with a few challenges. They are listed below.

• Usage of outdated systems or manual entry can show errors in stock availability in the warehouse. It can further lead to overstocking and out-of-stock issues.
• Businesses struggle to forecast product demand if they use any outdated systems.
• Lack of automation slows down the order fulfillment processes.

How To Choose The Right Inventory Management Service Provider?

There are various inventory management service providers in the market. But all of them will not provide similar services.

A business needs to consider a few factors while choosing the right inventory management service provider. Here is a list of a few of them.

1. Evaluate Your Business Requirements

A business needs to do a thorough analysis of its inventories, sales channels and storage requirements and then search for the inventory management service provider. The business should also evaluate whether it needs basic inventory tracking or automation features.

2. Access Technology

The business should assess whether the service provider has access to advanced technology like inventory management software.

3. Check Industry Experience

A business should choose a provider that has experience, especially in your industry. It can better understand the inventory challenges and provide solutions accordingly.

4. Review SLAs And KPIs

The business should inspect the service level agreements and key performance indicators to understand the delivery timelines and inventory update frequency of the service provider.

Final Words

A well-managed inventory is the backbone of supply chain management. Today, many ecommerce companies in India are relying on professional inventory management services providers to get access to real-time visibility of products and improve the order fulfillment process. But there are various service providers in the market. A business needs to consider a  few things, such as industrial experience and technology access.