Even in the midst of this inflationary period, you’ve probably seen an abundance of “on sale” advertising lately. Retailers are reducing their inventories of everything from printer paper to washer/dryers. Beginning in 2020, businesses large and small stocked up, hoping to manage supply chain uncertainties. Now they’re in an over-buying situation, riding the inventory boom-bust roller coaster as they try to balance supply and demand while inflation works its way through the economy.
Inventory management is 50% a knowledge game and 50% a guessing game. You may know what you have in stock. You may know the supply levels needed to maintain uninterrupted operations. You may know what the historic demand has been. But you have to make an educated guess at the future supply and the future demand. That’s where things get tricky. In uncertain times, you may find yourself over-buying “just in case.”
Excess inventory ties up a lot of cash. Inflation demands a lot of cash. Before turning to external funding from banks and investors, businesses are searching for internal sources of cash. Inventory reduction is one cash source, and yet it’s risky to reduce inventory while the economy is still in flux.
Better knowledge reduces the uncertainty. The better your inventory knowledge is, the better your guesses about your future inventory needs. Acquiring better knowledge, however, can be costly in terms of time and labor, just at a time when you’re hoping to spend less cash. This is the inventory management conundrum.
RFID is the answer. Better inventory knowledge is more than just having an accurate count of stock on hand and a sales or usage count over a week or a month. Better inventory knowledge means getting information in real time, on demand. Better inventory knowledge lets you make decisions ahead of a supply crisis, or respond quickly to other movements in your entire supply chain.
Better inventory knowledge gives you a competitive advantage.
The 19th century Rothschild banking fortune was established when the family used carrier pigeons to get information about events that influenced the economy – information that no one else had in those pre-telegraph days. The Rothschilds had better knowledge. They didn’t have to guess about the future.
RFID does the same thing for businesses today. With a combination of handheld and doorway readers, RFID allows you to have continuous polling. Warehouse inventories are updated in real time. You have better inventory knowledge. No other inventory information system delivers inventory data faster, as this video shows. Get better knowledge from RFID and avoid the cost of over-buying.
Photo © dusanpetkovic1 / AdobeStock
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