Inventory control has come a long way from the days of walking around a warehouse with a clipboard and checking off boxes. From smart warehouses to cloud-based tracking systems, wholesalers have more inventory management tools and strategies at their disposal than ever before.
Given that effective inventory management is key to improving cash flow, it's important for wholesalers to stay abreast of trends that are changing the way they track inventory.
Here are a few important trends to consider for your own operation:
1. Tracking driven by real-time data
Real-time data in the form of streaming analytics can help wholesalers accurately calculate their inventory needs in the moment, and as they change. Streaming analytics provides businesses with live data and insights into consumer behavior, gathered from sources including smart technology, mobile devices, sensors, apps and transactions. This data can enable you to better forecast demand, avoid running out of stock and keep tabs on when supply prices change.
2. Lower-cost tech upgrades
You might be thinking about investing in new software to optimize your inventory-tracking capabilities. But that doesn't have to mean a costly software overhaul. Many options exist for software that can integrate with existing systems, allowing businesses to upgrade outdated software without the expense of implementing an entirely new system.
Cloud technology is making it easier to upgrade systems, providing software updates that take place behind the scenes and with minimal interruptions. Cloud-based systems built specifically for warehouse and supply chain management are becoming more readily available and can be a lower-cost—and lower stress—option for wholesalers.
3. Inventory control for multiple channels
Consumers are shopping online, in-store, on mobile devices and via social media. And because there are more channels available, more consumers are buying your products than before. It's becoming more important for wholesalers to develop strategies to be able to track all these channels and the consumers who shop them.
Data analytics and inventory control software are part of the solution, but one thing you don't want is to have a different management system for each channel. So if your products are selling so well online that you decide to start selling in brick-and-mortar stores, you need to be managing the inventory for both of those channels in the same system. Otherwise, you could end up with gaps in your supply chain, which can result in delivery delays and back-ordered products.
By consolidating each channel's inventory controls into one system, you'll be able to see a complete picture of how much inventory you have available, and where it is in the process.
4. Cash flow management tools
Financing tools that enable businesses to optimize working capital are making it easier for wholesalers to narrow the funding gap between accounts payable and accounts receivable. For example, using an American Express business card helps you extend your cash on hand by offering up to 55 days* of unsecured credit to pay your expenses. It also provides you with a credit limit that expands based on the financial health or your business.
To benefit from 55 interest-free days of credit, you would need to work with your suppliers to set your inventory purchase date to just after the closing date for your credit card payments, which means you'll have 25 days before your next American Express statement arrives and 30 days after that to issue your interest-free payment. Ultimately, this can help your business extend cash flow by giving you more time to pay for new inventory while you are still converting existing inventory into revenue.
5. Internet of Things (IoT) to improve operations
Wholesalers are incorporating IoT technology to streamline their inventory supplies. According to a survey of warehouse professionals1, 75 percent of decision-makers plan to invest in smart warehouse management systems by 2020. And 62 percent specifically cited plans for IoT investments.
Smart shelving is one example of how IoT is transforming warehouse management. Smart shelves are equipped with sensors that measure the weight on the shelf surfaces to track inventory in real time. These shelves can be paired with sensors and beacons on merchandise and in trucks to record when products enter and leave the warehouse. The systems can provide inventory alerts when it's time to restock an item, and wholesalers can use this data to pinpoint trends and inefficiencies.
By having efficient inventory control strategies and extending your cash on hand to effectively manage inventory needs, businesses like yours can come out ahead when it comes to taking stock.
* As a charge card, the balance must always be paid in full each month in which no interest charges will apply. The interest free grace period is 28, 29, 30 or 31 days from the closing date of the current statement to the closing date of the next statement depending on the number of days in the calendar month in which the closing date occurs. The number of interest free days varies based on a variety of factors, including when charges are posted to your account, whether your account is in good standing, and the closing date of your statement
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.