Inventory management

If you are an owner of an e-commerce business or are planning to start one, knowing how to make warehouse efficient is of paramount importance. The process of storing and handling the physical products until being sold online is termed as e-commerce warehousing. It contains secure and safe product storage, as well as monitoring the location of the goods, when they enter the warehouse and the amount of stock at hand at a specified time.  

E-commerce warehouse management includes; 

• Warehouse personnel recruitment and management.
• Stock, machinery and security management.
• Development of lasting relations with carriers. 
• Keeping products safely and in good shape.
• Predictions on labour requirement and demand forecasting.
• Getting certifications and licences from renowned organisations and administration.  
• Scaling business as the company grows.
• Maintaining adequate safety rules.
• Regular logging of incoming and outgoing shipments.

Optimization of warehousing operations helps in maximizing the revenue and reinforcing the inventory management. It aids you focus on minimizing the labour costs, improving productivity and eliminating shipping errors. 

The mitigation of labour costs mainly refers to the reduction of non-productive time such as waiting time between goods being loaded and delivered. Curtailing the time consumed during the movement of goods from their packing containers to the point of sale will reduce the operational overheads of running the warehouse efficiently.

Keep a close tab on the product velocity. The term refers to the speed at which certain goods sell. If you quantify the data, you will realize some of your products seem to sell more than others, so arranging your warehouse layout appears reasonable to easily access these items. Place your fastest moving goods nearest to the packing plants to avoid needless transportation and to transport the products faster.

Make effective use of the vertical space. You can enhance the warehouse layout by utilising vertical storage space. You would still want to leverage on the floor space for stocks and quickly moving goods, but vertical space will increase security, access and productivity by implementing customised storage solutions.

It is also crucial to implement the proper shelving procedures in your warehouse in order to maximize the performance of the equipment. To increase the warehouse productivity, make sure there is proper and enough ventilation available in the storage spaces. Provide ceiling fans in order to maintain proper temperature inside the storage area. Make sure that the equipment like the conveyor belts have enough space in the middle of them so that employees can easily move around.

Strengthen your product labelling game. All parts of the storage should be correctly marked in order to ascertain what it is, but also to track other information using your labels. Excellent product labelling will streamline the stocking and tracking of your inventory.

It is also vital to maintain the cleanliness of the work and shipping areas. Ensure that there is regular cleaning of the flooring, washrooms and shelves. Regular cleaning of these areas will help eliminate the chances of spreading germs and contagious diseases. Clean and decluttered shelving keeps rodents, termites, lizards and mice away.

You should always make it a point to check on your inventory once in a while. Make sure that you do not have too much of some products than you actually need. This is especially important if you are using drop shippers. A drop shipper is someone who delivers products to your customers without you having to keep an inventory of the items.

In conclusion, 

You should follow the procedure mentioned above in order to maintain an organized and safe environment for your products and warehouse personnel. To reinforce your reputation further, employ warehouse management software and inventory management solutions.

Logistics is the process involved in the movement of materials and finished goods from one point to another. Generally, there are two types of logistics - centralized and decentralized. 

Decentralized logistics defined as a system where products and services are manufactured and delivered via different distributors and wholesalers who can provide the same product or service through many outlets. In essence, it is the concept of a network, in which companies use diverse distribution centres to increase their revenues. 

Centralized logistics identifies as a system where everything that a seller produces or sells is kept in the very same region. This makes things easier in a myriad of contexts. First of all, everything made or manufactured heads to the same location and ships from there. This optimises the rate of fulfilment and speed estimation. 

However, customers of these businesses often face slow shipping, they fail to serve customers by their inability to adapt and there’s a huge risk associated with keeping all the stocks in one place. A centralized system requires extensive infrastructure, technological know-how, and massive financial resources.

Even e-commerce giants like Amazon banks upon multi-channel fulfilment processes. It provides outstanding accessibility to customers, ensures speedy delivery, fewer risks with inventory management, mitigates management mishappenings and improves customer satisfaction.  

There are many components that form the core of a decentralized model, such as distribution, logistics, and business relationships. The core of the system is the fact that all these components are built on flexible principles, which enables them to grow independently while still responding to the changing market conditions and customer demands.

Distribution centres form the core of this system. These centres can be small or large, depending on the demand for the product or service. The chain includes a number of units, which can include warehouses, depots, manufacturing plants, or trucks that bring products from different locations and deliver them to the customer. Distribution centres are built on flexible principles so that they can adapt to market fluctuations, supply chain changes, and customer demand.

On the other hand, this does not necessarily mean that smaller companies do not have to maintain a distribution network. Distribution involves both the physical movement of products and the redistribution of unsold products. For example, when a product is sold at a discount, its price is marketed to a second-hand market. It could then be distributed to the third-party at a higher rate. This is also known as drop shipping.

There are several factors that affect the cost of distribution. The distance and shape of the distribution network have an impact on the operational costs of the companies. Other factors, such as staffing and labor, have an impact on overhead expenses. A lot of money can be saved if logistics companies use flexible infrastructure that reduces the requirement for additional space. 

With decentralized logistics in e-commerce, companies can reduce the overall costs of production. This is because they do not need to invest in additional building, staff, or labor just to deliver the goods to their customers. It allows companies to compete on price with other online vendors. They no longer need to pay expensive freight fees to transport goods from one place to another. They can also cut their overhead expenses and increase profitability. 

Final words

Decentralized logistics in e-commerce allows e-businesses to gain a stronger foothold on the Internet marketplace.

A barcode scanner is a simple tool that business owners don’t deem necessary unless inaccuracies come up in the inventory. A barcode scanner for inventory can help in stock taking, stock organizing, and reminds when there is a need to reorder. There are a lot of options to choose from - right from wireless barcode scanners to Bluetooth ones. However, before using one consider the hardware, software, and portability of the same. 

To narrow down the choices for a business owner, stated below are some of the top barcode and QR code scanners: 

• Brainydeal USB Automatic Barcode Scanner 

For people who need a basic solution, this barcode scanner is a perfect choice. It is easy to use and practical. The scanner scans at the rate of 100 scans/second. 

    Pros - Low Price & Easy to set up 

    Cons - Limited Features & No wireless functionality 

• NADAMOO Bur3003 433Mhz Wireless Barcode Scanner 

Business owners who prefer scanning items on the move, this barcode scanner works well - both indoors and outdoors. The installation of this cordless barcode scanner is simple. All one needs to do is plug it into the USB port of the computer. 

Pros - Wireless scanning, two pairing modes, & upto 10,000 barcodes can be saved offline. 

Cons - Slow response time 

• Symcode USB Automatic Barcode Scanner 

Symcode Barcode Scanner is easy to install, stylish and has a speed of 100 scans/second with decoding capability. 

Pros - Simple installation, compatibility, & shockproof from upto 1.5 meter drop. 

Cons - It is a little costly than other similar barcode scanners. 

• TaoTronics TT-BS030US 2-in-1 Bluetooth & Wired Barcode Scanner 

The scanner comes with a convenient 2-in-1 design. The user has the option of wireless bluetooth connectivity or can connect it with a wire. Practically, it supports all types of barcodes. 

    Pros - Long lasting battery, & quick scanning speed 

    Cons - It is costlier than other models

There are multiple benefits of using barcodes and QR codes for inventory management. The primary ones are speeding up the process without compromising on the accuracy. But before purchasing a barcode and QR scanner for the business, research well in advance and consider all the important factors

Supply chain management is managing the flow of goods and services. It includes all the processes that help create a final product from the raw materials. For any successful business owner, supply chain management is a crucial part of all business activities. An efficient supply chain helps businesses to form strong relationships with suppliers. That will in turn help businesses avoid any delays in shipment and at the same time reduce logistical errors. 

So, it can be said that the benefits of an efficient supply chain are unparalleled. Here are some ways in which businesses can achieve that:

• Partner with Reliable Suppliers 

While looking for suppliers, most business owners think that cost is the most important factor. However, it is one of the important factors but not the only one. A business actually needs a reliable supplier because that will ultimately allow the business to offer the best quality products to customers. Find suppliers who are reputed for following business ethics, timely delivery, and maintaining quality. 

• Constant Improvement

It is a misconception that once the supply chain is established, the job is done. A business owner can achieve efficient supply chain management only when he/she is constantly trying to improve it. Innovate and find ways to cut costs, reduce the time to market, and offer high-quality customer service. Always keep finding ways to improve the supply chain. 

• Use Latest Technologies 

Technology is here to make lives easier. In the same way, technology can be used to make supply chain management simple too. For instance, a Warehouse Management System (WMS) will allow businesses to analyze how effective the SCM is and keep a record of the same. Enterprises that want absolutely effective supply chain management can also use transport management software. All of this software will reduce manual work and help make faster decisions. 

• Employee Development is Equally Important 

For supply chain management workers, it is like facing new challenges every day. These challenges are even more prevalent in the case of perishable or fragile products. It is necessary for the employees to understand the impact of their actions on the business. Therefore, regular training programs are not sufficient. Employees should also get on-job training and mentoring. If they are allowed to work on a rotational basis and get a chance to undertake different responsibilities, they will understand the effect of it all on the business. 

To conclude, making use of the above mentioned best practices results in efficient supply chain management which further results into increased profitability and optimization of resources.

In the last two decades, only 0.6% of firms from the Fortune 1000 and S&P Europe 350 have generated revenue and profit growth every year that is better than their industry peers. Supply chain inefficiencies constitute a significant reason for this lack of consistent performance across most resource-rich operations. 

For small and medium-sized businesses, this issue can be more challenging as they generally have lesser leeway in supply chain negotiations. Here are a few actionable ideas you can use to manage efficiencies in your supply chain:

1. Streamlining Contracts

For many companies, the documentation around contracts is still done using boilerplate contracts provided by compliance teams and lawyers. The management and compliance teams might be able to go through these. Still, the operations and SCM teams, who are directly working on them, often have a tough time in establishing exact supplier and buyer responsibilities in line with the contract.

In larger enterprises, the issue gets further exacerbated as the master contract is centrally managed & stored, while the operations teams work with Statement of Work contracts. This leads to the scope of creeping and unmitigated risk exposure. In a study conducted by a consultant, the master contract entailed the supplier to bring the goods in a truck. The statement of work contract asked the same supplier to bring the goods in a helicopter without any obligations for insurance. 

Using easily accessible agreements with clearly defined parameters can mitigate such risks quickly. 

2. Supplier Portfolio Diversification

This is a counterintuitive approach. Placing orders with fewer suppliers can help you get economies of scale, greater leeway in the negotiation, and even simplify your work as the purchasing team. However, if the supplier faces manufacturing, sourcing, or other upstream issues – your entire process will go for a toss. 

Instead, you can apply the Pareto Principle where the suppliers are divided into:

• Class One Suppliers who take care of 80% of the orders but constitute only 5% of the total number of suppliers.
• Class Two Suppliers who take care of 15% of the orders constitute 15% of the total number of suppliers.
• Class Three Suppliers take care of 5% of the orders and constitute 80% of the total number of suppliers.

3. Get Certificate of Insurance and Ensure Financial Viability of the Supplier Community

Ensure your suppliers provide you with a Certificate of Insurance that is precisely in line with the master contract and statement of work you have agreed to. Along with this, smaller companies that provide credit rating services can also run financial health checks on the suppliers, sub-contractors, and other ancillary service providers to your suppliers. With these documents, you can stay assured that your suppliers have adequate financial resources to conduct their operations and save you from any counterparty risk. 

4. Deploy RPA Tools for Redundant Processes Exposed to Human Errors.

Bring in your IT team or an external vendor to cut the processes that are redundant and time-consuming. Order processing, supporting documentation, supply chain visibility updates – these are the common areas where you can apply RPA tools and get higher efficiencies.

5. Create Automated Workflows for Sharing Data with Adequate Authorization Protocols within the Firm.

Finally, as you streamline the outbound interactions, make sure your internal operations have been optimized. Quite often, the ground-level team gets quick updates about potential delays and errors. But, the approvals from the senior team members keep the issue unresolved. With a lack of authorization, teams also tend to get delayed in executing change orders. Automated workflows sensitive to authorization protocols can easily save this process into simple requests and rule-based approvals. 

In final words, it depends on the needs and size of your organization in deploying the above-mentioned strategies to manage your supply chain efficiency. 

Inventory storage is critical for any business to prevent loss incurring from lost goods, misplaced goods, theft or so. 

The first in the process of inventory storage is to define where exactly to store your stock. To do so, there are three methods possible:

1. Dropshipping: It is a technique that does not require a business to store all or some of its selling products. The items are purchased when the customer places the order and the supplier ships the order directly to the customer without having you store them beforehand.

It definitely saves you from the hassles of inventory management however, it has its own downside as well. Let’s take a look at some benefits and limitations of dropshipping:

Benefits

• Supply and storage are maintained by the supplier.
• You do not have to worry about inventory shrinkage.
• Cost-effective as stock carrying cost can cause havoc on small businesses.
• Having said that, this technique is best suitable for start-ups.

Limitations:

• Lack of control, as the products are not supervised by you, quality remains in doubt.
• Since shipping is managed by suppliers, speedy delivery may not always be achieved.
• Although you may save on storage and shipping costs, the margin on the product can be limited.
• You cannot prepare for a demanding product or sale period inventory. This may cause a bad shopping experience in the case when your demanding products remain out of stock.

2. Third-party logistics service (3PL): A good example of this is Amazon’s Easy Ship. eCommerce businesses selling on Amazon have the flexibility to store their stock in Amazon’s warehouse and at a reasonable shipping charge, they entirely manage the delivery of your products. 

3PL service lets retailers store their stock on rent in a third-party warehouse. 

Benefits:

• Inventory management is looked after by the service provider saving you from all the strenuous work and extraneous cost. However, rent and shipping cost has to be taken care of.
• You can prepare in advance for sale periods by stocking your in-demand products.
• If shipping is executed by a business, the speed of delivery can be maintained and controlled.
• More quality control compared to dropshipping.

Limitations:

• Costlier than dropshipping as you are expected to bear storing cost.
• Might have to maintain a minimum stock level.

3. Self-fulfillment warehouse: As the name suggests, it is completely maintained by the company to store its inventory on its own premises and achieve greater control.  All the carrying cost, shipping cost, management cost, staffing cost and operational cost are incurred by the company. It is an onerous task and larger companies usually invest in well-integrated inventory management software that gives a 360o control. 

Benefits:

• Greater control of the quality and delivery of products.
• Pipeline inventory can be used to prepare stock for the next period.
• Control on purchase can procure long term benefits for a business

Limitations:

• Highly expensive, best suitable for large enterprises.
• Manually inventory management can take days of hard work.
• May require investing in automation tools.

In final words, failing to store your inventory appropriately can cause a waste of surplus required for effective business operations. 

Inventory record is the procedure of documenting information that an enterprise maintains with the number of all the physical goods and the price at which they were bought and sold. This data comprises all the data regarding the stocks that are at hand, in order, on hold and work-in-progress. An ordinary inventory detail can be documented either manually or in a computer file depending on the size of the business, the volume of products and the complexity of stock figures. 

All these inventory accounts will have specific descriptions related to each product such as location, serial number, batch number, location, identification number, rate, category and more variables. Inventory records also log goods that may soon be used in production or sale. This way, your business will always have an idea as to when the stock is beside the usual tracking and inflow of items.  

It also identifies what percentage of inventory is being used at a given period of time and how many of them are sitting idle. Therefore, it enables the business to maintain optimum inventory on hand and reduces the cost of keeping the extra inventory. With that, adequate inventory recording also keeps a tab on the little changes in the stock such as volume of items on hand, the number of ingoing and outgoing goods.

There are numerous benefits of inventory record - from documentation of daily financial statements to preparation of yearly taxes.  It can be utilized to formulate informed strategies for the business, to make operations more cost-effective and to track the volume of inventory. By comprehending every little whereabouts of an inventory, it is possible to boost the efficiency of processes by segregating, categorizing, rearranging and maintaining the stock in the warehouse or production plant where the stock is most beneficial. It also makes sure that the stock is not damaged, defective, obsolete or damaged.

Why would the manufacturer need inventory reports?
The main reason why it is important to track inventories is that manufacturers are required to report the current status of inventories to the government every year. This means that they have to keep track of their inventories to ensure that they sell the same number of products as they originally planned. It is also important to make sure that inventories are accurate, in order to get a good ranking in sales and revenue.

Another important reason is manufacturers are required to send out a notice of a shortage to retailers. The purpose of this is to increase the sale of a product in the market. If there are items in stock that are not selling, then the manufacturer will be forced to reduce the number of products that they have in stock. This is a good opportunity for them to add to the inventory.

Final thoughts 

Inventory reports are extremely useful to business owners. They can give them insight into what products are not selling in the marketplace. and how best they can improve on the product's selling techniques. To get the most out of inventory reports - all the channels should be streamlined through inventory management software and services.