Re-Imagining Warehouse Operations to Manage Inventory in a Tech-Driven World

By the end of 2023, 20.8 percent of retail purchases are expected to occur online.  Experts predict that number will grow to 24 percent by 2026. On the logistics and supply chain management side, it means more customers will continue to expect top-notch service from click to doorstep. Efficiency is key to the success of any warehouse operation when it comes to order fulfilment. With the rapid advancement of technology globally, warehouses have access to a wide array of cutting-edge tools, systems and processes that can streamline operations, improve accuracy, and enhance productivity.

As the technology advances, it’s critical to consider what remains as a best practice within an e-commerce fulfilment setting, along with what the future might bring. Effective inventory management remains at the heart of warehouse operations with far-reaching benefits, including the systematic approach that encompasses forecasting, ordering, receiving and allocating stock. In today's business landscape, real-time access to inventory and order status is essential to a consumer’s experience and achieving customer satisfaction. Therefore, the key to revolutionizing warehouse operations lies in embracing both traditional practices as well as new, innovative inventory management solutions.

Fulfilment Operations Turning to Cloud-Based Innovation for Inventory Management 

For most e-commerce businesses, navigating the most secure way of managing inventory is a key priority when shaping their warehouse and fulfilment operations. The conversation around this increasingly points to cloud-based options as key to fulfilling this quota for retailers, with many businesses turning to the cloud for their inventory management needs. Cloud-based inventory management has the advantage of minimizing risks that legacy warehouse systems and servers might pose, such as tech not updating or working correctly.  

Other risks that are minimized by using the cloud include any problems associated with supplying customers with the correct or up-to-date information on their order, a supplier not having an accurate view of how much stock they have on-hand or where that stock is located (in the warehouse or elsewhere) due to using tech which isn’t fit for purpose. The cloud helps avert these problems and offers the advantage of speed when it comes to how much inventory is provided and processed in real time.  

Remote access also poses a significant advantage in harnessing the cloud for inventory management and a vehicle to integrate with other tech as opposed to traditional data servers which can prove unreliable. 

Collaborative Automation to Supplement the ‘Human’ Touch  

Automation in warehouse operations has been one of the major developments in the space that's clearly here to stay. The benefits are far reaching, especially when looking at the redeployment of labor to other value-added tasks. An automated warehouse vs. a nonautomated warehouse also poses attraction and benefits for workforces, as well as productivity improvements, incentivizing a workforce to build their careers with a retailer that has its finger on the pulse of tech mobility and innovation.  

Yet, it's collaborative automation that offers the greatest success. As AI tech takes shape, its influence on e-commerce is still an evolving situation. However, it's clear across the industry that the human touch cannot be replaced by AI. While the introduction of robots for processes like picking is becoming commonplace in some warehouses, the use of modern tech working in collaboration with fulfilment associates on the ground continues to be an invaluable combination in a warehouse and a relationship that achieves the best results for both business and customer.  

Automation: Risk vs. Reward 

When it comes to automation, establishing the right process doesn’t come without risk. Ultimately, businesses need to be careful they don’t forget about their return on investment and traditional fool-proof processes by succumbing to the attractiveness of full automation without established processes in place to monitor it. This is because, in some cases, it will take longer and cost more to fully automate.  

There can be the temptation to automate so much that traditional ROI and payback mechanisms are compromised. Additionally, resource against automation to support infrastructure is still of vital importance so businesses will always need to source the right manager to oversee a warehouse facility. The candidate might not be the typical person you’d look for to manage a warehouse, as they would need to possess a different skill set to be able to manage and ensure automation processes are safeguarded, as well as trouble-shoot any problems in real time. 

Utilizing Big Data to Optimize Results   

Included in the mix with inventory management solutions is the importance of warehouse layout and storage capabilities. Warehouse operators can utilize big data to leverage analytics and real-time insights to optimize warehouse layouts, inventory placement and operational efficiency. A warehouse environment stores products in diverse ways and big data can track and identify how much case storage one area of the site must store inbound pallets, for example. Forecasting and predicting storage space is paramount in inventory management running smoothly to achieve the desired result — a robust picking and delivery journey for the customer which can ultimately encourage them to keep spending with their brand of choice.  

Inventory management trends will continue to evolve in the e-commerce fulfilment industry. Retailers will need to decide whether to call upon the traditional and tested methods that result in effective inventory management in the warehouse or to seek out new strategies at their disposal. It’s a delicate balance considering what technology to implement while not underestimating the problem-solving abilities of a human workforce. 

Kamran Iqbal is a commerce strategist with PFS, an e-commerce fulfillment provider.