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Inventory Management Best Practices

Wednesday, February 27, 2019 - 09:00
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Inventory Technology Best Practices
As more companies deploy these systems, some best practices have emerged.

“If you are going to invest in an ERP system to manage your warehouse and inventory, then you need to use it in all of your operations,” Moyers says. “That includes purchasing, receiving, and selling. The software is only as good as the data goes into it. If you skip steps, then it’s very likely your inventory is going to be out of whack.”

In fact, not scanning inventory into the inventory system is a key blindspot that Moyers says he sees when talking to aftermarket companies. “They take things out of inventory and don’t keep the system up to date,” he says. “There’s a lot of opportunity for leakage or employee theft. Guarding against that is a big task for our customers.”

In that regard, barcoding is another key best practice that the vendors interviewed for this story say is increasing in the aftermarket, but not as quickly as it could. 

“When you scan everything you receive, the inventory is accurate by part number, and all of the larger distributors have something like that in place,” Thompson says. 

Adoption is increasing among smaller and mid-size companies because the cost of the technology has fallen so dramatically. “Before, a scanner for a warehouse was a $1,500 investment,” Moyers says. “Today we can support scanners that are significantly cheaper than those units and our customers can use them without a huge financial outlay.”

“Barcode scanning is far more efficient from a cost perspective now,” Bunting agrees. “You can scan barcodes with our system using scanners that cost just $30 or $40. We’re seeing greater adoption now, because even at the jobber or retail store level those scanners are affordable.”

In customer demos, Bunting even uses a $13 scanner he bought on eBay to show customers how easy it is to adopt scanning. “You can watch a short video and be up and running with our software and barcode scanners in just a few minutes, and start scanning your physical inventory,” Bunting says.

Effectively using these new tools can also give the industry the ability to run a much leaner inventory. “It’s no longer necessary to have things on a month-long order cycle,” he says. “With regional warehouses and Amazon, you can keep a lean inventory. You can streamline inventory levels, but we don’t’ see a lot f companies adapting to that yet. But from a logistics perspective, we do have the ability to streamline what you keep on the shelf and still have satisfied customers.”

There are obstacles to applying technology to these inventory management challenges. Retraining is critical for the success of a deployment, but there is often employee resistance or institutional resistance to change, particularly if the old processes were in place for a long time. But manual processes will be harder and harder to maintain as more companies shift to ecommerce.

The Future of Inventory
The vendors that Aftermarket Business World spoke to for this story indicated there were some additional technologies and features on the way that could benefit the industry. 3D printing, for example, could change the way warehouse carry inventory (since they could create some parts on demand). More companies are also adopting the online storefronts integrated with their ERP and inventory so that they can expand into ecommerce.

Mobile solutions will be more important, particularly as more software moves to the cloud and hardware platforms become more flexible. Mobile devices are also playing a larger role in sales and customer service up and down the supply chain, as companies use tablets and phones to pull up account information and customer data that can be used to help improve inventory management and ordering. “Jobbers like the idea that they can meet with customers, pull up accounts and return rates, and all of that information is right on the tablet,” Bunting says. 

And even farther into the future, “smart” auto parts will be able to provide more accurate information about their status. “Think about what Tesla is doing,” Moyers says. “They are embedding integrated circuits in each part, so the part can be smart enough to ask to be replaced, and then check with the inventory control system if it’s in stock or not. That’s an application that’s pretty far out there, but that’s the vision Tesla has. Software systems like ours will have to adapt to that.”

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