Imagine the world’s most recognized brand has to end up with a disorganized supply chain because it failed at inventory management.
A decade ago, Nike lost around $100 million in sales due to disruptions in tracking goods. How did they overcome it? They had to onboard an inventory management system that promised to predict items that would sell best, meet their customers’ demands, real-time data errors that could hinder operational success and save millions.
This is just one example of why it is critical to manage stock levels and prioritize inventory management.
According to Supply Chain Dive, 62% of businesses face financial loss because of poor inventory management. Contrary to this, taking an inventory pulse check every once in a while, can help you in saving the cash burn.
Most businesses know the importance, but they are still not willing to make the shift from traditional and inefficient inventory management methods.
What’s Pulling You Away from a Smart Inventory?
Inventory management is not yet an upfront problem for many industrial OEMs even when they have seen continuous financial loss. Call it ignorance or looking at inventory challenges as insubstantial, they still need to verse the promised opportunities a smart inventory system can offer.
However, there are factors that inhibit them from chasing the smart inventory boundary line.
- Initial cost: Implementing a smart inventory management system requires significant upfront investment in the application, resources and hardware. Without a significant ROI, it is difficult for many OEMs to onboard a smart system.
- Data dearth: A smart inventory management system or AI ML inventory management system relies heavily on data to gather accurate insights and predictions. Many industrial OEMs lack organizing, collecting, and standardizing data from multiple connected systems/sources.
- Skill scarcity: For full-fledged streamlined inventory tracking and management, OEMs need smart inventory management systems backed by AI ML technologies. These technologies require skills and knowledge that traditional manufacturers lack, making it a significant challenge.
If you want to move from the conventional way to the smarter way, you need to accept the inventory model transition into smart systems.
Turn Inventory Lags to Cash Profits with Smart Inventory Management Systems
If OEMS need to upscale their businesses, they need a competitive advantage; a Smart Inventory Management System is the leeway. These systems come with tech remedies that not ony provide visibility into the entire inventory cycle but also improve overall operations; which means reading the current inventory process, molding it as per the future demands and preparing a full-scale inventory cycle that meets the market demand.
The inventory management software market was projected to be valued at USD 2.58 Billion in 2023, with projections indicating that it will reach USD 7.69 Billion by 2032. The market is expected to expand at a compound annual growth rate (CAGR) of 12.9% over the forecast period 2024-2032.
Effective inventory control and management strengthen successful manufacturers. It minimizes carrying costs associated with the storing inventory, reduces the risk of equipment failure, maintains appropriate stocks, improves equipment availability, which can further progress informed decisions as well as help in delivering customer-centric systems by enabling better production and purchasing.
When businesses are seasoned with these promises, they can significantly boost their operational excellence and focus on cash profits.
Smart Inventory Management Puts You Above Your Competitors
Smart inventory management systems are more than just tools to avoid overstocking or stockouts. They offer full control over inventory assets and come equipped with a range of advanced capabilities that impact various aspects of inventory management.
- Real-time supply chain visibility
AI ML-backed inventory management systems leverage data from connected IoT devices and facilitate real-time tracking of equipment throughout the entire supply chain. Having a smart inventory management system, you can get instant updates on multiple stock levels across various channels and locations. With predictive analysis, plant owners can forecast potential bottlenecks, demand fluctuations, and possible asset failure to ensure zero equipment downtime.
- Improved inventory tracking
Having a smart inventory management system, OEMs also have the potential to apace data gathering and processing and have real-time inventory insights. Using historical data and current market trends, these systems guarantee proactive inventory management. Moreover, smart systems allow automation of inventory tracking as well as instant responses to inventory challenges.
- Inventory forecasting
One step that differentiates the OEM leaders from laggards is the ability to meet customer demand through solution forecasts. Using the predictive analytics capabilities of smart inventory management systems, OEMs can gather deep insights into inventory trends, past sales data, associated inventory costs, and turnover rates. Using these insights, they can curate concrete inventory management plans that meet their customer demands. An in-depth knowledge of market trends helps with forecasting customer needs.
- Automated replenishment
A huge differentiator between traditional and smart inventory management systems is the ability to automate replenishment. Using the AI/ML integrated systems, OEMs can automatically reorder equipment when they have reached thresholds without manual interventions.
For example, car manufacturers can deploy Mixed Integer Linear Programming (MILP) based tools that look at various factors such as current stock levels or expected demands and runs stimulations to ensure they never run out of stocks, that could have cost and delivery consequences and boost timely replenishments.
Excellent Inventory Is About Customers
Excellent inventory management is not just about having the right stock; the real benefit is meeting customer demands without delays. Now when manufacturers are at the competitive edge, they are expected to deliver what customers need, when they need it, without delay. A smart inventory management system powered by artificial intelligence (AI) and machine learning (ML) transforms this process, enabling OEMs to stay ahead.
Having a smart inventory management system puts the focus where it should be: ON THE CUSTOMER.
AI and ML technologies analyze patterns in customer demand, forecast trends, and optimize stock levels to ensure the right products are always available. By predicting demand accurately, OEMs avoid overstocking and stockouts, resulting in reduced costs and enhanced customer satisfaction. Smart inventory management systems can also adapt to real-time changes in customer behavior or supply chain disruptions, allowing for quick adjustments that keep operations smooth.
OEMs can provide tailored systems, speedier deliveries, and a seamless experience that builds trust and loyalty.
Outcasting Inventory Barriers With Better Connectivity and Visibility
Connectivity and supply chain visibility into the inventory cycle are the differences between OEM leaders and the ones that are lagging in inventory management. A smart inventory management system provides both, plus additional technological capabilities.
With better visibility and connectivity, Industrial OEMs can gain insights into their supply chain. This information can help them identify inefficiencies that could then be resolved. Smart inventory management systems help OEMs make better decisions and improve their operational efficiency and revenue growth.
Also read: Establishing a Future-proof Warranty Management Model for Industrial OEMs
