The benefits of real-time inventory tracking

As your ecommerce brand scales, you experience a bittersweet challenge — a high-volume of inventory and too little time and resources to manage it. But that’s no reason to panic. Real-time inventory tracking solves challenges for direct-to-consumer (DTC) brands, 3PL providers, and fulfillment brands alike.

With expanding fulfillment operations, real-time inventory visibility is a fundamental part of  keeping customers happy. If you hold on to traditional inventory management methods, you face being overwhelmed by inventory challenges like stockouts and overstocks. Such drawbacks will impede your capacity to satisfy fulfillment obligations, leading to poor customer experiences and high operational costs.

Real-time inventory tracking helps streamline supply and inventory management planning and bridge challenges associated with modern warehousing and fulfillment. In this article, we define real-time inventory tracking, explain how it benefits omni-channel and online retailers, and discuss the technologies that enable it.

What is real-time inventory tracking?

Real-time inventory tracking is the practice of leveraging technology to live track and manage inventory levels throughout your ecommerce supply chain, from ordering and warehousing to distribution and returns. It helps you gather the most updated inventory information from all your supply chain networks and populate it on a single dashboard for efficient progress monitoring.

Real-time inventory tracking benefits

Online retailers, 3PL brands, and fulfillment companies that use inventory tracking realize several advantages.

Accurate Inventory

Tracking each stock-keeping unit (SKU) across all your sales channels is vital for maintaining optimum inventory levels. However, manually monitoring SKUs in multiple fulfillment centers is time-intensive and error-prone, especially if you deal with assorted merchandise. The demand volatility in the modern ecommerce industry will always alter your count.

But with real-time inventory tracking, you get instant updates on every SKU added or removed from your inventory. It means you’ll always have accurate and up-to-the-minute inventory counts.

With accurate inventory data, you’ll make precise calculations such as:

• Average inventory
• Inventory turnover ratio
• Optimal inventory level
• Lead time

You can automate inventory calculations using a reliable warehouse management system like Logiwa. Automation eliminates the risk of human error, making your inventory calculations more accurate.

Improved Efficiency

Real-time inventory data enhances inventory visibility, which is fundamental for online brands and 3PLs with distributed inventory. With instant inventory updates, you know how much inventory you carry in each fulfillment location at any given minute. This information allows you to streamline warehouse operations and optimize your end-to-end supply chain, helping you achieve better operational efficiency.

For instance, by tracking your inventory at rest, you can accurately estimate your warehouse costs for a particular period. You can also monitor inventory in motion and estimate delivery times more accurately. With access to real-time data in inventory control, it’s easier to plan operations and enhance warehouse efficiency.

By improving warehouse efficiency, you reduce your labor and operational costs. You’re also better placed to satisfy or exceed your fulfillment promises to customers. Given the central role of warehouses in fulfillment management, the benefits of improving warehouse efficiency with real-time tracking trickle down to all ecommerce operations — all thanks to real-time inventory tracking systems.

Lower Costs

Maintaining accurate inventory levels saves you substantial inventory handling costs by avoiding stockouts and overstocks.

Stockout cost is the revenue you forgo by failing to have enough of a product stocked for all the customers who want to buy it. Overstock costs are the carrying costs you incur by storing excess inventory that outstrips demand. With inventory tracking, you avoid loss of revenue on both fronts, because you have an updated inventory report that guides you on the stock quantity you store and purchase.

This becomes increasingly important during high-volume times like Peak Season when optimizing warehouse space can mean the difference between struggling and success. Logiwa IO, an advanced fulfillment management system (FMS), provides real-time insights that enable data-driven inventory management, warehouse space optimization, and agile decision-making.

Besides reducing your inventory handling costs, inventory tracking also lowers your delivery and return shipping costs. With access to real-time inventory data, you can plan your fulfillment more precisely. For instance, if you have inventory in multiple fulfillment centers around California, you can fulfill California customers’ orders from the nearest fulfillment center.

Doing so reduces your overall shipping distance and delivery costs. It also lowers return costs in case a customer needs to return a defective or incorrect product.

Elevated Customer Satisfaction

Customer experience and satisfaction are everything in ecommerce. Research shows that customer experience is the primary brand differentiator today, and not the product. The same research study shows that 45.9% of businesses are prioritizing customer experience over pricing and product.

Delivering an incorrect or defective order to a customer is a serious deterrent to a quality customer experience. Fortunately, inventory tracking systems support technology like barcode integration to improve order accuracy.

Key technologies in real-time inventory tracking

AI-driven fulfillment management systems (FMS) like Logiwa IO empoer real-time tracking by harnessing a variety of tech solutions to collect and process inventory data.

Some of the technologies that support real-time inventory management operations include:

• Artificial Intelligence (AI) and Analytics: Uses allocation algorithms to analyze inventory data and adapt to changing market trends and fulfillment needs
• Machine Learning: Analyzes current and past inventory data to predict future stock levels
• Barcode Scanners: Scans SKUs and ID barcodes to identify products during sorting

Logiwa IO’s unique headless architecture allows you to integrate with any system to  continually improve your warehouse efficiency with real-time tracking.

Watch the video above to experience Logiwa IO’s pioneering headless architecture—just one of a series of videos on Logiwa IO’s advanced features.

Logiwa IO’s real-time inventory management

Real-time inventory tracking can transform your high-volume fulfillment. With the right solution, like Logiwa IO, you’ll not only benefit from real-time inventory management thanks to AI-driven optimization,  but a host of other advances like our intuitive UI/UX, headless architecture, and easy configuration thanks to our industry leading app store.

Schedule a demo today with one of Logiwa’s fulfillment experts to discover how easy it is to put real-time inventory management to work for you.

FAQs about warehouse efficiency with real-time tracking