With an increased need for fulfillment speed and accuracy, inventory visibility is important to improve supply chain velocity, enhance fulfillment operations, increase efficiency and exceed customer demand. The benefits of improved inventory visibility include:
1. Operation efficiency
The more automated your inventory visibility process becomes, the more labor hours you save, allowing you to allocate your resources to other important tasks.
2. Better quality control
Inventory visibility is primarily used to determine how much and what inventory is located at any step along the supply chain. However, it also allows industries with strict regulations, such as grocery or pharmaceuticals, to better track products from point to point.
Inventory tracking and visibility are especially important in the case of a recall, when products must be quickly tracked down and pulled out of market before causing damage.
3. Improved forecasting and predictability
One of the main benefits of inventory visibility is that it provides accurate information to help companies improve their demand forecasting and understand how current inventory levels reconcile with expected consumer demand. This customized data allows for fewer stockouts and better inventory optimization and replenishment.
4. Better resource allocation
Inventory is often a company’s largest expense. Each product represents a portion of company money that is tied up on a shelf in a warehouse or DC. Companies should strive to have the lowest possible amounts of inventory available while still meeting consumer demand. This frees capital to put towards other goals, such as growing the business, but it can be a delicate balance to maintain as companies want to ensure they meet customer demands. Inventory visibility provides the information needed to maintain this inventory control balance and maximize company profits.