IoT In Inventory Management: Impact and Benefits

The Internet of Things (IoT) is making its impact on several business sectors and has dramatically altered how businesses work. It is fusing the digital and physical worlds, creating a smarter and more responsive environment around us. 

 

One of its most significant impacts can be seen in Supply Chain Management and Inventory Tracking, where it has not only reduced costs and time but also paved the way for an effective inventory management system.

 

But, before we get into how IoT is transforming various elements of the supply chain, let us first understand  the words IoT and Inventory Management.

 

What is IoT and Inventory Management?

 

The Internet of Things (IoT) is a massive network in which numerous physical items equipped with sensors and software are linked to the Internet and share data with one another about how they are utilized and the environment in which they function. 

 

The sensors continually transmit data about the operational status of the devices through the network. IoT allows devices to communicate real-time data without the need for human interaction.

 

According to Forbes, the Internet of Things is the process of "linking any gadget with an on/off switch to the Internet as well as other devices." The Internet of Things (IoT) is a rapidly expanding network of gadgets that includes anything from cell phones, headphones, wearable devices, and lights to nearly any other item you can think of.

 

As per Blume Global, Many businesses are increasingly deploying IoT devices to improve supply chain visibility. Sensors in IoT devices monitor and report on a variety of crucial environmental elements such as location, temperature, light, humidity, movement, and handling speed. They may also monitor product storage conditions, assisting firms in ensuring quality control throughout their supply chains.

 

The process of ordering, storing, using, and selling a company's inventory is referred to as inventory management. This comprises raw material, component, and completed product management, as well as warehousing and processing of such commodities.

 

In warehouses and retail establishments, IoT technology may also increase visibility in production, inventory management, and predictive maintenance. Warehouse mistakes may be expensive. Incorrect procedures and mistakes necessitate extra work to correct, incurring unnecessary expenditures. 

 

IoT devices can assist to decrease human labor and mistakes while also increasing processing speeds and overall warehouse efficiency. Companies are putting IoT sensors in their warehouses to track the movement and usage of materials and other assets. Sensors on shelves are also being used by businesses to relay real-time inventory data to their management system. 

 

IoT and smart warehouse management are assisting in the elimination of costly and time-consuming errors by guaranteeing that inventory levels and equipment locations are clearly recognized and continually monitored. 

 

IoT in Inventory Management 

 

All inventory items that need to be monitored in an inventory management system that employs IoT and RFID technologies are equipped with an RFID tag. Each tag includes a unique identification number (UID) that contains encoded digital data about an inventory item, such as a model, batch number, and so on.

 

RFID readers are used to scan these tags. When an RFID tag is scanned, a reader obtains information about the IDs of the tags and sends this data to the cloud for processing.

 

The cloud is also given information about the reader's position and the moment the data is recorded. The cloud provides the location of the object with the matching ID based on this data, creates visual output of the findings, and shows real-time changes.

 

Smart Warehouses are one of the most popular methods for businesses to get a competitive advantage these days. Consider Amazon, Best Buy, Walmart, and other retail behemoths. 

 

These businesses are utilizing cutting-edge technology like smart shelves and live dashboards to manage and maintain their inventory in real-time, ensuring that best-selling goods do not run out of supply and that they can efficiently deal with varying seasonal needs.

 

These items are often labeled with a barcode or an RFID tag so that they may be scanned and recognized by the linked systems. Every item handled with IoT must be tracked and logged on inventory management systems throughout the supply chain method.

 

These tagged items can be readily monitored using ID numbers, and you can know whether they are incoming from vendors or outgoing to customers right away. This improves order fulfillment and customer service while also streamlining manufacturing operations.

 

Companies expecting to benefit from this new solution are looking to the cloud. Cloud-based inventory systems are the leading warehouse technology today, allowing inventory management systems to provide enterprises with improved insight into their own inventory levels, item location, anticipated demand, expiry dates, and so on.

 

Also Read | IoT in Mining Industry

 

Impact of IoT on Inventory Management

 

The environment is changing, though, thanks to growing IoT technology. In terms of asset tracking, IoT sensors are expanding their capabilities and contributing in the process of getting parts, goods, and resources where and when they are required. 

 

Furthermore, with the help of IIoT and RFID, organizations may overcome the complexity associated with manual procedures and monitor inventories in real-time.

 

Here's how IoT boosts global inventory management systems :

---

Impact of Inventory Management

---

 

1. Real-time contribution for efficient supply chain

 

IoT devices employ several technologies to help with touchless data collecting. GPS and other technologies, such as Radio Frequency ID (RFID) chips, smart gadgets, and mobile sensors, are used by IoT devices to monitor and verify items and shipments. According to Blume Global, the massive quantity of data now available from IoT devices, wearables, and merchants allows for real-time inventory visibility.

 

2. Management Warehouse

 

The utilization of IoT-enabled technologies, as well as advancements in 5G wireless technology, is proving beneficial in enhancing warehouse management logistics.

 

Warehouse management is focused on optimizing the optimum use of space. The available space in a warehouse may be better allocated if the utilization pattern is established. To increase warehouse efficiency, more frequently used products might be kept closer to the access points.

 

3. Artificial Intelligence Algorithms

 

Artificial intelligence has given us the ability to create clever algorithms that can help us track and manage inventories far better than the ordinary person. 

 

AI technologies will aid in discovering trends that humans cannot see by carefully analyzing IoT data. This procedure will undoubtedly enhance inventory management decision making. AI-powered inventory management systems can handle functions such as replacement inventory orders more effectively.

 

4. IoT offers accurate location monitoring and improved inventory tracking

 

Products labeled with IoT devices, according to The Daily Plan IoT, aid in more efficient storage and delivery. Inventory tracking and route planning using IoT devices may determine where and when products are delayed in transit. This helps with emergency planning and identifying alternate ways to accelerate the supply chain.

 

5. Better Lead Management

 

IoT-based inventory tracking is critical in estimating the lead times required to assemble all of the parts required for production. High lead times are identified in order to minimize stumbling blocks caused by a vital part(s) being absent and causing manufacturing process stoppages. This improves the synchronization of manufacturing operations and inventory demand fulfillment.

 

Also Read | How is IoT revolutionizing the Sales Industry 

 

Benefits of Iot in Inventory Management

 

IoT-based inventory management provides a solid platform for the digitization of industrial ecosystems. There are also many process and economic benefits of IoT in Inventory Management, such as:

 

1. Inventory tracking and reporting automation

 

Inventory managers no longer need to spend time on manual tracking and reporting thanks to RFID and IIoT. Each item is monitored, and data about it is automatically captured in a large data warehouse. Automated asset tracking and reporting may save up to 18 hours of work time each month while also lowering the likelihood of human mistake.

 

2. Constant insight of the number, position, and movement of inventory items

 

An IoT-based inventory management solution provides manufacturers with precise visibility into the flow of raw materials and components, work-in-process, and finished goods by providing real-time updates on the status, location, and movement of the items, allowing inventory managers to see when an individual inventory item enters or leaves a specific location.

 

3. Inventory Management

 

Inventory managers who know their stock well are more likely to have the appropriate products in the right location at the right time. Manufacturers can reduce the amount of inventory on hand while satisfying the demands of consumers at the end of the supply chain by using real-time data about the number and position of inventory items.

 

4. Identifying operational bottlenecks

 

Manufacturers can identify bottlenecks in the manufacturing process and target equipment with poor utilization rates by using real-time data about the position and number of inventory items. For example, if inventory tends to pile up in front of a machine, a manufacturer feels the equipment is underused and must be serviced.

 

5. Optimization of lead time

 

Solutions based on IIoT enable manufacturers to shorten lead times by giving inventory managers with data on available inventory and machine learning-driven demand projections. 

 

For instance, Zara was able to move a garment from design to smart warehouse in only 10 days thanks to an RFID-based inventory management technology.

 

An IoT-based inventory management and asset tracking solution offers constant visibility into the inventory by providing real-time information fetched by RFID tags. It helps to track the precise location of raw materials, work-in-progress and finished goods. 

 

As a result, manufacturers can balance the amount of on-hand inventory, increase the utilization of machines, reduce lead time, and thus, avoid hidden costs bound to the less effective manual methods.

 

An IoT-based inventory management system has several benefits for firms who embrace it, including RFID for precise inventory monitoring, real-time communication, touchless data collecting, and smart warehouse management with the integration of drones and robots. 

 

Despite issues or problems with IoT deployment, such as cost, security, and scalability, IoT Inventory Management continues to improve and provide potential for advancement. In this aspect of supply chain management, this is quickly becoming an efficient and cost-effective approach. 

 

This technology has a lot of advantages, and there are several easily available industrial solutions that may help organizations stay competitive. It's time to take advantage of this and address your inventory management problems.