Can IoT Make Your Retail Inventory Management Lossproof?
IoT systems have been used in countless industries to optimize processes, retail business included.
One of the latest ideas is to use IoT to leverage and improve retail inventory management systems to support operational capacity. And here’s how.
IoT reshapes the modern, data driven world into a network of physical objects such as devices, vehicles, buildings all connected and exchanging information with each other.
There are endless possibilities when we mix physical objects with virtualization and data streams in this interconnected way, such as better retail data analytics. This is especially true for aspects of good inventory management software, with IoT solutions giving us new and exciting possibilities for retail inventory management.
Retailers are now looking for smarter and more time-efficient retail inventory management software. Traditional methods of warehouse management are too time-consuming and prone to human error, costing businesses time and money. With today’s Internet of Things and big data era, problems such as inventory loss and incorrect inventory levels can be avoided.
What is retail inventory management?
Although the concept of good inventory management software isn’t completely exclusive to retail, it plays a more important role in the industry perhaps more than any other.
Retail can be split into several areas:
- Offline - businesses sell products from brick and mortar retail store
- Online - when a businesses sells items via a website or third party online service
- Multichannel - a company sells items via multiple different routes, often a combination of online websites and physical stores
- Omnichannel - a company selling items via a multichannel system is able to provide an integrated experience for customers across different platforms
A retail inventory management system controls the process of ordering, processing, storing and using company assets, regardless of the retail type mentioned above. These assets make up the retail inventory costs of the business, and these may involve anything from raw materials to finished items ready for sale, and anything in between.
A retail inventory management process presents a delicate balance to strike – keeping the stock management right on track to prevent inventory shrinkage or excess inventory.
Boosting the effectiveness with retail inventory management techniques
Highly optimized retail inventory management systems result in reduced costs and a greater understanding of sales patterns. The best inventory management tools provide retailers with a greater amount of inventory data to use to run their business more efficiently, including:
- Product quantities
- Product locations
- Easier to manage inventory
- Optimal amount of inventory levels to prevent unsold inventory stock
- How many and how often to reorder products
- Profit margin according to the chosen model or item
- Sales reports with insights about best/worst-performing item sales, categorized by location and sales channel
- When to discontinue a product
- The effect on sales data of changing seasons
How IoT and data engineering solutions reduce inventory losses and track inventory levels?
There are several essential areas which can reduce losses and ensure accurate inventory tracking for retail stores. Let’s take a look at how IoT can support retail inventory management.
Smart IoT connected shipping pallets
There are billions of shipping pallets currently used around the world and they are key objects used in supply chain and retail inventory management. IoT comes with the possibility of using a wireless network of pallets connected to the system which track inventory and how they are moved from one location to another.
This kind of supply chain management system can provide real-time insight for every single pallet, which dramatically reduces inventory loss, as well as minimise the effort required to find and replace missing pallets.
With data being transferred in real time to the cloud, managers are provided with clear and instant information, such as tracking inventory systems to see how it moves through the supply and how this can be used to build data-driven solutions suitable for business.
Last but not least - if a system easily tracks every pallet, it can use pallets made with materials more durable and less heavy than wood. That leads to a decrease in fuel consumption and wood waste, as well as easier handling thanks to lower pallet profile.
RFID and smart shelves
Smart shelving units within retail inventory management systems such as cabinets or shelves can be fitted with radio-frequency identification (RFID) tags. Items that are connected to RFID tags are kept in the unit to be inventoried. Using this RFID technology, smart shelves can monitor inventories in real-time to solve common problems experienced with inventory management processes.
RFID tags can also be embedded on employee clothing as a social-distancing measure to comply with pandemic rules and regulations.
Autonomous inventory robots
Automated guided vehicles (AGV) are mobile vehicles mainly used for manufactured or raw materials handling, as well as in floor transportation as a part of retail inventory management systems. They're based on systems that enable matching specific pallets and shelf locations.
Using human operated forklifts and other vehicles means these processes are prone to human error, and can lead to significant inventory loss or accidents. AGVs do not need an operator, so retailers can improve and accelerate transportation processes in warehouses, making it more efficient, reliable and safe.
This also allows crucial labor cost reduction and time saving, as nearly 100% accuracy selection of a pallet or a stock shelf can be achieved. Inventory robots know which part of a building they should approach, so they plan the shortest route and start their journey immediately.
Easy-to-deploy solutions with serverless big data tools
Serverless functioning is a computational model where a cloud provider is responsible for executing functions by allocating resources optimally throughout a system. This method simplifies the building and management of applications using a cloud solution.
Instead of worrying about data infrastructure, a data engineer can focus on the tasks it takes to ensure an end-to-end, highly functioning data pipeline within a retail inventory management system.
Here are some arguments for moving big data infrastructure to a public cloud with a serverless model:
- Serverless offerings of various cloud providers to set up a big data application, an incredibly useful industry booster
- Design pattern to build real-time and batch pipeline with cloud-native application
- Log Aggregators applications are built on a serverless toolset with code and learnings.
- Serverless solutions support all popular industrial and Open Source data formats (structured and unstructured)
- Switch from data batching with scheduler into data streaming with real-time analytics processes
- Serverless solutions support high availability with level 99.999 %, which is required level for industrial implementation
Traceability with real-time data analytics
Factories require high observability of their process, and this means we need excellent traceability for all code deployments and data pipelines.
By traceability, we mean understanding facts in real-time from production services and factory processes. All data in near real-time are then visualized on a dedicated set of dashboards. This means a lack of necessity to look at code repositories to identify problems and anomalies within a retail inventory management system.
Data dashboards present the current state of the production process. Not all problems in production are coming from the implementation domain, and sometimes a complex combination of locks, hardware glitches and personnel performance is needed.
Tracking trends on special dashboards allows a clear view on the current situation of production.
Is IoT the future of retail inventory management?
IoT-based smart retail inventory management systems and sales data can be a great support in improving customer experience and boosting overall operational efficiency.
Internet of Things solutions deliver a vast range of benefits to logistics providers and empower retail businesses to maintain oversight of inventory costs, prevent loss, and obtain new data from segments of the supply chain that were previously invisible.
These robust benefits from IoT significantly reduce supply chain costs and enable more sustainable practices in supply chain logistics. Retail industry can enter a new era with these future-proven connectivity solutions to take full advantage of IoT innovation and support better retail inventory management systems.