How IoT helps inventory management in warehouses

How IoT helps inventory management in warehouses
Amazon Prime, the retail giant’s delivery program which promises same-day or two-day delivery for an annual membership fee, is proving to be a big hit. Attracted by the convenience of shopping online and instant gratification, people everywhere are slowly but surely changing the way they shop. This is correspondingly shaping the future of retail and how the supply chain is being managed.

This doesn’t come as a surprise to Daniel Dombach, Director of Industry Solutions for EMEA at Zebra Technologies. “What we see these days, if we look at the warehouse landscape and the way client expectations are shaping, is the expectation to get goods faster – tomorrow or end of day delivery. For that, you need a higher proximity of goods to the consumer and if you want to be flexible and agile in your operations, you need very good visibility of your inventory and to be able to change things fast. This is where IoT comes in. It is about retrieving data from all the sensors and transforming it to business valuable information.”

Inventory and asset visibility
Stock visibility, or the ability to know where each item is, where it came from, and where it is intended to go, was quoted by all of the interviewees as the main demand from supply chain and warehouse managers.

“Our supply chain platform provides global visibility to track inventory from contract manufacturers all the way to customers. It is important for efficiency, as well as for redundancy and contingency planning. For example, if an earthquake hits a component supplier in Japan, the client can immediately know which parts they will have to get from somewhere else,” said John Bermudez, VP of Product Management at Infor.

Inventory tracking and scanning is not a new concept. The supply chain industry has been developing and improving technologies for this purpose for decades, starting from barcodes and then going all the way to RFID tags. So where does IoT come in and what benefits does it deliver? “We already track shipments from the time the pallet leaves the supplier to the last mile,” said Bermudez. He continued by talking about how IoT will enable continuous real-time visibility as to where everything is. “Tracking now depends on going through various scanners. We want to have active IoT to track shipments continuously and allow better reporting. There are a lot of ideas on how to use IoT in warehouse management, but the most important is to use it to make fast decisions. The goal is to get the right product to the right customer as fast as possible.”

“For example, by using active RFID tags or wireless battery operated tags on pallets, we can identify a whole order at one time, identify hot items on the pallet, and make sure we take them out first. This is especially true for components that are parts of a larger order, where delay in the delivery of specific components can get a whole project stuck,” added Bermudez.

The importance of visibility in supply chain management goes beyond mere inventory tracking. “We need to define the need as asset visibility, not just inventory visibility. Assets also include workers and equipment like forklifts in the warehouse. By knowing their location and condition and combining it with the inventory, we can make faster decisions and enhance efficiency. In the past, warehouses were a cost center. Now, with visibility and transparency, you can differentiate yourself from the competition and it’s a growth opportunity,” said Dombach.
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