How Can IoT Improve Your Inventory Management?

Have you ever stopped in front of your inventory and said: Well, this is going to be a walk in the park.

Not really, right?

Inventory management can be a serious thing to control.  There are items you need to make sure aren't lost, stockout risks, and let's not get started with the headaches that come with manually counting all of your inventory products.

The truth is…

Traditional methods aren't really efficient anymore. Your clients want faster deliveries than ever, your whole business needs to rely on decisions based on real-time information and…yes, you need help.

That's where the internet of things (IoT)  comes in: 

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What's the IoT?

Let's say it together: The Internet of Things is not a difficult subject to understand.

It's just a really practical network where physical devices can kind of connect to each other and communicate over the internet, hence the name.

It could be a sensor, tags, scales, fully automated robots, or even cameras. 

Think of the IoT as that special group of equipment that works for the benefit of your company. 

For example, in terms of inventory management, you won't need to scan a barcode to know what's in stock; the information has already been updated by a collaboration between your shelves and the automated delivery vehicles.

No more need to walk in circles around your warehouse to figure out if you have a product or not 

The system exactly knows where everything is.

How does it work?

Okay, but things do actually talk to each other?

That's kind of too much sci-fi, right?

Well, yes, but there's a science behind it 

Let's say that you've smart tags on your products. They're capable of sending signals to sensors placed around your storage place. Those sensors, in turn, share data with your inventory software, so it can gain updates in real time. 

Even better? 

All this tech can talk to your existing systems

A perfect network of technology, indeed 

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Key IoT Technologies for Inventory Management 

Radio frequency identification.

RFIDs look like your regular  small stickers.

But they aren't far from being regular.

They work with radio waves, have inside a microchip, and even an antenna so it's simpler for them to communicate with RFID readers, like sensors.

Instead of scanning each item of your inventory manually, you can use RFID readers to instantly track dozens (or even hundreds) of items at once.

Smart shelves 

Yes, even your shelves are becoming digital.

Now, this doesn't mean they're going to start walking away from your warehouse in the middle of the night.

What it means is that they come equipped with weight sensors or RFID readers, designed to automatically detect when your stock is running low. 

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Like we said before, your system will know.

Drones and robots 

Inventory management sometimes can be a mess, and keeping a close eye on all the tiniest details gets difficult, especially when demand levels reach new heights.

So what's a manager to do?

Start working with robots

Drones and robots can now roam warehouses doing inventory counts, scanning barcodes, and checking stock levels.

Scales 

Scales, yes, but intelligent.

You can weigh it and walk away. Smart scales automatically update inventory counts as items are added or removed, which is perfect for bulk materials or anything sold by weight.

GPS and beacon technology 

When your inventory is constantly moving, whether it's inside a massive warehouse or across the country, location tracking is key. GPS gives you a real-time view of where your shipments are in transit, while beacons and proximity sensors help you locate items within a facility.

Sensors 

We couldn't finish the list without talking about sensors. 

They're probably one of the most popular features of any IoT application.

And with good reason 

Sensors are constantly gathering information and feeding it to your software in real time. And we're not just talking about temperature or humidity here, nowadays you can use smart sensors for:

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• Motion sensors: Do you want to improve the security in your warehouse? These sensors can tell when items are moved unexpectedly or detect any possible patterns in the way inventory acts in your company, something pretty useful if you are looking for ways to optimize your layout.
• Weight sensors: These can be placed under bins, shelves, or pallets and automatically track inventory levels by measuring weight. Working with these sensors can be useful for bulk goods or materials that are hard to count piece by piece.
• Environmental sensors: Yes, not everything is related to temperature or humidity, for certain industries it's essential to monitor these things. Environmental sensors are perfect for keeping sensitive products safe and compliant with storage standards.

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Benefits of Implementing IoT in Inventory Management 

Okay, so up till now, we know that understanding the internet of things is far from being complicated and that there are many great elements that make IoT the next big move for any inventory manager.

But what's the actual benefit for your daily business operations?

Saves time

And, you don't need us to remind you that time is a precious commodity.

But think about the time you spend checking your stock levels, double-checking your spreadsheets, or scanning every single item. 

With IoT, tasks like tracking, counting, and even reordering can happen automatically. Smart sensors, RFID, and connected systems keep everything updated right when you need it. 

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Tracking 

And speaking about things you need to know, one of the main challenges supply chain and logistics face comes in the form ofa  lack of visibility. Even for sustainability purposes- something that's becoming increasingly relevant for customers and stakeholders alike- you need to be aware of what's happening with your company's assets. 

With GPS, beacons, and smart tags, you get a live map of your inventory, where it’s been, where it is, and where it’s going.

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Better warehouse management 

Warehouses are the place where your inventory lies.  But to be honest?

It's not only a physical location, you can forget about it. 

For example, what happens if you find yourself needing new picking routes? 

Then you have to optimize the access to your warehouse. Maybe the current layout is the culprit behind all those recent bottlenecks. 

Working with IoT-connected devices is a very efficient way to understand what could be improved. 

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Optimization gets easier.

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And speaking about improvement 

One of the things that makes inventory management such a headache is the absence of optimized processes and trying to figure out how much inventory you really need. 

Finding the balance between what your customers want and what you can offer can be a problem if you don't know what's going on, right?

IoT helps you to find that sweet spot by keeping a track of trends, predicting demand, and even making automatic reorders. 

Traceability 

If you need to know the full journey of a product, from manufacturing all the way to your customer, Iot's got your back. 

With blockchain and connected devices, you can create a digital trail that documents every step. That’s not only great for quality control and recalls, but it also builds trust with your customers.

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How to Start Working with IoT in your Inventory Management?

Identify your current situation 

This is crucial whenever you're trying to implement a new change, but it's even more important if you're planning to work with digital tools. 

Take a look at what's going on in your inventory at the moment. What are your most pressing pain points?

Do you have any specific problems you need to fix?

Knowing this is going to help you determine which IoT solution can bring your company the greatest value.

Keep things small

Yes, implementing new technologies can be exciting, but before jumping into the wave and fill your warehouse with robots, it's a better idea to start small and focus on a single area, like tracking items with RFID or using only smart shelves in the most busy sections of the warehouse. 

Once you're comfortable with the results, it's time to keep growing.

Choose the right option 

As we've seen in the previous sections, when it comes to IoT, there are many options available, from RFID to robots. 

So how can you choose the right one? 

Well, if you've analyzed your inventory landscape, you are able to determine what solution integrates best with your processes and is truly capable of solving your company's problems.

If you’re already using an inventory management platform, check if it supports IoT plugins or integrations.

Gather feedback from your team 

Okay, but how can you be sure that the solution you chose really works?

Talk with the people who are actually using it.

Ideally, you'd have your team trained on the new system before it's implemented, so once it starts running, they are prepared to share with you their thoughts. 

Is it working as expected? 

Is it intuitive to use?

Sit down with your warehouse staff and be open to hear their feedback as a key metric of the success of the IoT tool.

Check your ROI levels 

Because at the end of the day, you are a business and need to obtain some return on your investment. 

For the case of IoT systems, it's best to wait a period like 3 or 6 months before reaching a conclusion.  Work with metrics that are relevant to your operations such as:

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• Order accuracy
• Fulfilment times
• Efficiency 
• Warehouse labor costs 

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