Understanding Real-Time Inventory Management
June 28, 2021
We usually take for granted how much information we have available on-demand.
If you couldn’t look at a clock to see how much time you have before your next meeting, how much food you have at home before you go to the grocery store, or how much money you have in the bank before making a big purchase, you’d be frustrated and unable to do your job well or be functional.
Knowing real-time inventory counts should be no exception. For both supply and demand purposes, real-time inventory management is a critical component of running a successful business.
Gone are the days when inventory was tracked using spreadsheets or ledgers by manual inventory counts. Not only did this take a ton of time and focus, but it also led to errors and discrepancies from a lack of visibility.
In today’s hyper-competitive retail environment, brands need to be able control stock and view inventory status in real time.
Read on to fully understand real-time inventory management, its benefits, and how ShipBob’s can help improve your logistics operations.
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What is real-time inventory?
This level of inventory control and visibility improves supply chain resilience, so you can respond to demand, restock inventory on time, prepare for unexpected events, and keep your business running smoothly.
Leveraging your data to understand your supply chain & customers
With real-time inventory tracking, you’re able to collect and view up-to-date inventory data at any time across your distribution network.
To establish an on-demand logistics operation, you need an inventory management system that plugs into your supply chain, connects with all sales channels and distribution centers, so inventory can be recorded from all channels in one place.
Real-time inventory data that’s streamlined provides an accurate and transparent view of inventory levels at any given period of time.
Access to real-time inventory data provides unparalleled insights into past and future demand, as well as SKU and channel performance. Understanding historical inventory trends empowers you to optimize your supply chain, so you can expand your business effectively.
Lastly, harnessing real-time information adds a layer of transparency, so you can easily oversee operations without being involved in the day-to-day. It also makes supply chain planning much easier, since you have the data needed to support your decision-making.
6 ways real-time inventory management benefits ecommerce
Whether you sell directly from your online store and fulfill orders yourself, or you sell across different channels, your inventory is constantly moving throughout the supply chain.
Without real-time inventory management, it’s a challenge to stay on top of inventory levels and know when it’s time to replenish inventory to meet demand, without overstocking and increasing holding costs.
Here are the six benefits to real-time inventory management.
1. Inventory control in real time
When you have real-time inventory management procedures in place, you can easily track inventory at the operations-level.
From scanning inventory on the warehouse floor to preparing units for kitting and assembly, you know exactly how much inventory is being received, how much is ready to sell, how many items are being prepared to ship, etc.
When you know the real-time status of inventory and how much of it is at each location (if you use multiple warehouses), you can make business decisions quickly and restock accordingly.
For instance, ShipBob offers multiple fulfillment locations, which allows merchants to split inventory across locations. With inventory allocation data, merchants are able to expand into new locations and view which SKUs are performing the best in certain areas, so they can optimize inventory levels at each location based on demand.
“So many 3PLs have either bad or no front-facing software, making it impossible to keep track of what’s leaving or entering the warehouse.
On the supply chain side, I just throw in what we placed at the factory into a WRO in the ShipBob dashboard, and I can see how many units we have on-hand, what’s incoming, what’s at docks, and so on. I can see all of those numbers in a few seconds, and it makes life so much easier.”
Harley Abrams, Operations Manager of SuperSpeed Golf, LLC
2. Accurate reporting using the most current data
Having access to real-time inventory data also helps ensure inventory accuracy.
Without the right technology in place to track real-time data (or needing to rely on inventory tracking using spreadsheets) can cause inventory shrinkage, mispicks, and inventory theft to be overlooked.
You also risk dealing with more stockouts and overstocking inventory, which both cause profit loss and lower customer satisfaction.
Having integrated technology helps keep inventory records up-to-date, so you have more visibility over your ecommerce inventory at all time.
ShipBob offers an advanced analytics reporting tool to help you gain insights from real-time inventory data. This way, you can outsource logistics, have ShipBob store inventory in locations of your choice, and fulfill orders on your behalf, while also maintaining full visibility into inventory levels.
“At my previous 3PL, nothing seemed to come easy. Even getting a reshipment was nearly impossible. I felt like I had to babysit them. Everything was done on spreadsheets and it was very difficult to get the fulfillment data I needed.
Now, we’re working with a tech-enabled 3PL that seamlessly provides data to help us make business decisions. ShipBob’s analytics tool is a game-changer and it’s helped me grow my business tremendously.
With ShipBob’s free analytics tool, it’s so easy for any of my team members to pull data in real-time.”
Courtney Lee, founder of Prymal
3. Keep the right inventory levels
Demand is always fluctuating, which makes it a challenge to optimize inventory levels. But with real-time inventory data, you can better plan inventory and store it accordingly at each warehouse based on historical data and trends.
You can also use such data to calculate the right amount of safety stock to help ensure there’s always enough inventory without overpaying on storage or having too much capital tied up in inventory.
Just think of how this can keep everything from stockout costs to substitution rates to holding costs under control.
Using real-time inventory levels is the most accurate and time-savings method of restocking inventory to always meet demand.
Many inventory apps for ecommerce stores provide the ability to set automatic reorder point notifications based on past inventory performance at the SKU level, so you can be notified when inventory is running low.
“ShipBob’s analytics tool is also really cool. It helps us a lot with planning inventory reorders, seeing when SKUs are going to run out, and we can even set up email notifications so that we’re alerted when a SKU has less than a certain quantity left. There is a lot of value in their technology.”
Oded Harth, CEO & Co-Founder of MDacne
4. Improve supply chain workflows
One of the core benefits of having inventory data delivered in real time is you can quickly and easily spot points of concern within your supply chain, so you can make improvements accordingly.
Inventory management relies on other stages of the supply chain, from production lead times to warehouse receiving timelines. Real-time inventory data provides insights into or should at least factor in how how long inventory takes to get from the manufacturer to your warehouses, so you can better manage your supply chain.
“Now we’re at two fulfillment centers, and being able to have the analytics and see how everything is working together has been extremely helpful for me on the operations end.”
Dana Varrone, Director of Operations at Organic Olivia
5. Easier inventory management across distributed warehouses
When you have customers located across the globe, it is recommended that you split inventory across multiple warehouses once your order volume warrants it. But establishing an international presence can make managing inventory even more challenging.
But with real-time inventory data, you can strategically store the right amount of SKUs at each location to meet demand, as well as reduce shipping costs and speed up transit times for orders that are placed by your customers.
For instance, since ShipBob’s entire global fulfillment network is powered by the same technology, you’re given access to insights on SKU performance at each location, so you can determine the ideal distribution strategy and allocate product efficiently.
“We have access to live inventory management, knowing exactly how many units we have with ShipBob in each location.
It not only helps with our overall process in managing and making sure our inventory levels are balanced but also for tax purposes at the end of the year. ShipBob made that entire process very simplified for our accountants and us.”
Matt Dryfhout, Founder & CEO of BAKblade
6. Provide a better customer experience
There are several ways real-time inventory solutions improve the customer experience.
For one, it helps you decide which items are in high demand, so you can make sure you order enough to prevent stockouts (also taking supply chain disruptions into account).
With proper demand forecasting, you can take a more data-driven approach to making predictions, so you can strategically decide how much inventory you need stored at each location or allocated towards each sales channel.
“ShipBob’s technology provides cost savings. Other 3PLs pass fees onto the client for work they do related to manual processes because they lack the fulfillment technology needed to meet customer expectations.
ShipBob’s technology has effectively eliminated the work of a program manager at other 3PLs, while providing immediate visibility into inventory and the ability to respond and make changes myself.”
Carl Protsch, Co-Founder of FLEO
Real-time inventory management solutions for ecommerce
As more ecommerce brands compete by establishing a multichannel retailing strategy along with the pressure to deliver to customers fast and affordably, real-time inventory solutions help brands of all sizes keep their supply chain running, despite uncontrollable delays, unexpected events, and ever-growing customer expectations.
Though there are several inventory management solutions on the market, there’s also the opportunity to partner with tech-enabled 3PL that offers outsourced fulfillment as well as real-time inventory tracking, along with a full suite of logistics solutions.
Let’s go over the benefits and limitations of using a standalone inventory management software versus outsourcing fulfillment to a 3PL.
Real-time inventory management & control software
For retailers, real-time inventory management software is maybe the greatest thing since sliced bread.
Designed to continuously track and manage your inventory at the store or warehouse level, these systems can help your business maintain a high inventory turnover ratio and always ensure that the products your customers need are in stock at every location.
Inventory management software is designed to record inventory data in real time. Here is a list of some of the top-ranked inventory automation and management solutions for ecommerce:
The only limitation with such standalone inventory management solutions is that they are mostly designed to manage inventory flowing in and out of the warehouse.
Fortunately, all the leading inventory management solutions listed above directly integrate with ShipBob’s order fulfillment technology, which streamline inventory data and ecommerce fulfillment insights all in one place.
“Another ShipBob integration I love is Inventory Planner. It saves me hours every week in Excel spreadsheets, and I can raise a PO in minutes when it used to take me hours.
For every order I placed for years, I was ordering too much or not enough. Between inventory forecasting tools and the ability to auto-create WROs, we don’t have stockouts much anymore. I sleep better at night.”
Wes Brown, Head of Operations at Black Claw LLC
Real-time inventory management with a 3PL
3PLs enable you to fully leverage the benefits of real-time inventory management by dealing with the physical aspects of tracking and managing inventory for you, without having to rely on spreadsheets or multiple dashboards.
With a 3PL like ShipBob, you don’t have to spend all your time managing inventory, as data is automatically recorded and available through a single dashboard. At any time, you can view inventory on hand, set automatic reorder points notifications, manage SKUs, and forecast demand.
Ultimately, this level of inventory automation can free up your time, so you can focus more on revenue-driving initiatives.
“We have a Shopify store but do not use Shopify to track inventory. In terms of tracking inventory, we use ShipBob for everything — to be able to track each bottle of perfume, what we have left, and what we’ve shipped, while getting a lot more information on each order.”
Ines Guien, Head of Logistics at Dossier
Get real-time inventory management & control with ShipBob
ShipBob’s powerful software with built-in inventory management is just one part of our best-in-class retail fulfillment solution. Aside from the real-time tracking and management of inventory, the platform automatically tracks fulfillment metrics too.
Whether you store inventory in one of our locations or multiple fulfillment locations across the globe, ShipBob’s dashboard provides insights to help you improve last-mile delivery, reduce shipping costs, allocate inventory based on demand, and access data to help make better business decisions.
Our entire distribution network is operated by the same warehouse management system (WMS), which offers real-time data and insights into fulfillment and automated shipping performance. This also ensures consistency across our entire network, so as you expand as you please.
ShipBob’s ecosystem of partner apps for inventory management, returns management, inventory accounting, and more all offer the ability to easily plug ShipBob into your existing tech stack and enable a powerful logistics solution to meet customer expectations.
For a fully custom logistics solutions, ShipBob also offers an open Developer API, so you can make ShipBob work for your business, no matter what your needs are.
“We utilize ShipBob’s Inventory API, which allows us to programmatically retrieve real-time data on how many units of each product are currently stored at ShipBob’s warehouses. We currently use this API to generate custom reports to tie this inventory data into our accounting platforms.”
ShipBob is an international 3PL with the fulfillment infrastructure, technology, support, and expertise you need to stay competitive in an ever-changing industry.
Partner with us to save time, money, and headaches on logistics while still maintaining control over your supply chain. To learn more, click the button below.
Real-time inventory FAQs
Get answers to the most frequently asked questions related to real-time inventory management.
How do you keep track of inventory in real time?
There are several inventory management solutions on the market, from simple inventory apps to ERP inventory systems that provide real-time inventory tracking solutions. Another solution is partnering with a 3PL with fulfillment technology that enables real-time inventory tracking across distribution channels, so you can also remove fulfillment from your plate.
Why is real-time inventory management important?
Access to real-time inventory data provides important insights into demand, along with product and sales channel performance. Understanding historical inventory trends helps you plan for and optimize your supply chain over time so you don’t run out of stock, tie up too much capital in inventory, and misrepresent your inventory value for your accountants.
What’s the best way to keep track of inventory?
The best way to keep track of inventory is to the ditch the spreadsheets and implement an inventory management system that records real-time inventory data automatically. By automating inventory tracking, you spend less time managing inventory while also improving accuracy and avoiding mistakes human errors, which can cause inventory shrinkage, stockouts, and more.