7 Keys to Overcoming Real-Time Inventory Blind Spots

October 22, 2024 - 11 minutes read

Technology and best practices give you an unobstructed view.

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Visibility has always been one of the primary objectives of inventory management. Before computers and barcode scanners arrived on the scene half a century ago, locating items in the warehouse or pulling work orders often involved tedious searches that were frustrating for retailers and manufacturers, as well as their customers. Today, a long list of computer-based innovations have made real-time inventory visibility a possibility, but not always a reality.

Despite the growing list of tools at our disposal, human error, business silos, and poor execution are among a myriad of factors that stand in the way of optimized visibility. A few simple tips and best practices can turn this trend around to improve profitability and customer satisfaction.

“Everybody gets so much information all day long that they lose their common sense.” – Gertrude Stein

Why is real-time inventory visibility important?

The term real-time has become a popular buzzword for services including communications, financial trading, security monitoring, and data processing. For each of these applications, providers recognize the impact of delays on customer perception, and the value of eliminating them. Real-time visibility is also increasingly important for inventory management, with quick and accurate order fulfillment depending on clear lines of sight throughout the supply chain. Additional benefits of real-time inventory visibility include:

• Optimized efficiency: Visibility is the key to improved operational efficiency through reduced transit times, minimized errors or missing items, and improved warehouse productivity through strategic item placement and automated order processing. 

• Faster issue resolution: Real-time data makes it easier to overcome unexpected transportation delays, quality problems, or demand surges by providing a reliable base of information for root cause analysis, decision-making, and customer communication.

• Reduced shrinkage: The term shrinkage refers to inventory loss from things like damage, theft, spoilage, or inaccurate records. Real-time inventory management goes beyond counting to provide a holistic view of inventory quantity and quality to uncover the true root causes of shrinkage. 

What causes real-time inventory visibility blind spots?

The best inventory management software makes it easier to attain real-time visibility, but having the right tools available is only half the battle. Enhanced visibility comes from a combination of software, best practices, training, and communication that collectively provides an accurate picture of inventory status. “Blind spots” that can make complete visibility elusive stem from:

• Data entry errors, manual data transfer processes, and misplaced items

• Multi-channel commerce practices that create siloed inventory databases

• Inadequate tracking of returns, scrapped products, and quality issues

• Over-reliance on technology without physical verification

Real-time inventory visibility also requires a centralized hub of information to establish an ultimate source of truth. Anything that can cause this information to be incorrect, incomplete, delayed, or conflicting has the potential to create a blind spot. For example, when cycle counting for a remote warehouse location relies on manual data entry processes, visibility is impaired while the data is input and errors are corrected. 

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7 keys to removing real-time visibility blind spots

Adding more inventory management and automation tools to your arsenal might seem like a logical answer, but many common visibility pitfalls call for practical solutions based on training, consistency, and improved collaboration throughout the supply chain.

1. Information sharing 

Data sharing is one key to real-time visibility that predates the computer age but remains equally important today. This becomes apparent when important information from suppliers, carriers, or customers is unavailable. Privacy concerns and misaligned inventory management tools and practices can create barriers between (or within) organizations that prevent optimized data sharing.

Effective data sharing protocols, policies to mitigate privacy concerns, and standardized data transfer formats to prevent translation delays help to overcome these challenges. Application programming interfaces (APIs) can bridge gaps by integrating inventory management systems with selected partners in a secure and reliable fashion.

2. Demand forecasting     

Real-time visibility allows businesses to track inventory levels more accurately, which also prevents them from building or ordering parts unnecessarily or experiencing unexpected stockouts. Demand forecasting practices rely on real-time data for advanced data processing and predictive analytics, but these practices also remove real-time inventory blind spots by identifying trends and anomalies early, allowing proactive adjustments to stock levels and replenishment cycles.

Demand forecasting also improves visibility by minimizing excess stock that adds to the monitoring burden and improving the alignment between supply and demand to reduce the risk of unseen inventory gaps.

3. Inventory audits   

Cycle counts and audits are often viewed as a necessary, albeit tedious, part of doing business, but the value of regular inventory audits cannot be overstated. Inventory audits serve an important purpose by allowing any previously undetected gaps or discrepancies to be rectified. Barcoding and mobile inventory management apps have reduced the legwork required to perform counting activities, but there is still no substitute for human eyes and hands to verify inventory accuracy.  

4. Mobile data capture    

Modern technology reduces visibility blind spots by bringing monitoring and tracking tools closer to the parts. For example, a warehouse employee who detected damaged items within a warehouse once relied on paper notes (or memories) hand-carried to a central information depot. Today, mobile inventory management apps and barcode scanners allow workers to capture transactions and changes instantly. Additional mobility benefits include: 

• Simultaneous tracking across multiple locations
• Real-time inventory alerts for employees on the go
• Image capture to share information on quality or delivery status
• Sales transactions instantly posted from the field

As mobile technology continues to improve, geolocation and other monitoring functions are finding their way into smart inventory tools like RFID tags that don’t require physical contact with parts.

5. System integration

A lack of integration between inventory management, warehouse management, mobile point of sale (POS) systems, and customer relationship management (CRM) solutions is another leading cause of inventory blind spots. The value of these powerful software tools is diminished when they are not synchronized. On the other hand, unified data from these sources improves visibility for retailers and their customers while making forecasts and reports more dependable. Ensuring the software platforms for each function are compatible, then thoroughly testing the integrated system prior to deployment reduces the quantity and impact of system integration issues.

6. Optimized reverse logistics

Reverse logistics, or supply chain processes used to return products from end users back through the supply chain, have garnered more attention in recent years, with 30% of all items purchased online being returned. Reverse logistics increase operational expenses for retailers, and they can also lead to inventory management blind spots when returned, refurbished, or scrapped items are not properly tracked during sorting and recovery processes. Adapting the inventory management system to track, disposition, and analyze returns in real-time improves visibility while ensuring customers receive compensation for returned items quickly.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffet

7. Cloud-based inventory management software

Cloud-based inventory management software is the key to synchronizing data from all devices, locations, and omni-channel commerce channels. With all data transmitted to and from the same central cloud location, the risk of receiving outdated or inaccurate information is minimized. Cloud-based inventory management systems leverage this wealth of data to improve analytics and customer service processes while eliminating the need for on-premises servers and IT infrastructure.

Real-time inventory blind spots: Final thoughts    

Retailers recognize that real-time visibility is not just the latest catchphrase, but an essential prerequisite for staying competitive in the 21st century. Many of the tools and practices we need to remove real-time inventory visibility blind spots have been available for decades, and computer technology and new innovations are continuing to move the visibility needle in the right direction.

Agiliron provides a full suite of cloud-based software tools including inventory management, mobile point of sale (POS), CRM, and warehouse management to support real-time visibility and data integration effectively while seamlessly connecting to all your favorite E-commerce applications. Mobile-friendly apps and POS solutions allow you to manage all your data in one place while selling from anywhere.

The goal of enhanced inventory visibility is not quite as elusive when you have the right software and processes at your disposal. Consistent monitoring and a bit of legwork can ensure the data you capture in real-time is as accurate and valuable as possible. Contact us today to discover how you can optimize your own visibility with the right inventory management software.