The Growth of Inventory Management - Unleashed Software
Inventory management originated even before the Industrial Revolution and has certainly evolved with time and expertise to become what it is today. The need for inventory management has always existed where trading was a livelihood and the stock management was imperative to protect one’s resources. The Industrial Revolution ushered in a boom in trade where mass production was required which, of course, placed more pressure on crude inventory management techniques and so new systems emerged. Now, we see a completely automated system being the norm. So how did we get to where we are today?
A brief history of inventory technology
Prior to the Industrial Revolution, merchants recognised the need to account for all stock sold that day, tally up what was left and predict what might be sold in the future. And so they used what resources were available: their time and ability to count. This, of course, took up a large portion of their working week and was prone to errors. We still use this method today, however it is only as a support to automation when verification is required.
Post-Industrial Revolution, businesses required a better process because trading increased and so did production and the need for efficiency. The punch card system was the brainchild of researchers at Harvard University in the 1930s. Using a punch card and papers with tiny holes readable by computers, businesses were able to track inventory from production, to the warehouse and to the point of sale (when customers were required to fill out their punch cards based on their purchases). As you can imagine, this process was labour-intensive and not totally efficient.
The first barcode was developed in the 1940s and 1950s using ultraviolet light-sensitive ink and a reader to mass label and track inventory. As technology improved, so did this concept and by the 1980s and 1990s, computers and software had made the process far more efficient and the technology far more affordable for a larger range of businesses. Read more about the history of barcodes.
The latest in inventory technology, the RIFD tag uses a microchip to transmit product information to a reader which can automatically update databases. As such, the manual data-entering associated with barcodes can be eliminated reducing the burden of time and the prevalence of errors. RFID tags have also made it possible to deal with real-time data thereby improving decision-making and efficiency.
Inventory management specialists claim that a mere two drones can replace the work output of 100 people, which is quite impressive indeed. Companies such as Amazon are already using drones and robotic packaging machines in their warehouses to ensure efficiency is maintained if not improved with the vast increased in eCommerce. It is only a matter of time before this technology is more widely adopted across all industries and company sizes.
How can operational activities support the evolution of technology?
With the advancement of inventory technology, the warehouse stands to become an efficient and near perfect workhorse, achieving speed and accuracy in production, sales and shipping. However, the full potential of technology and its seamless integration into business can only be realised with the support of operational activities. In particular, the advancement of inventory management requires the development of the inventory manager’s role. The role should no longer simply be seen as a product of the chains of events elsewhere in the organisation but rather, a stand-alone position where they are trained in supply chain management, sales and operations planning and mass production scheduling. In some ways, the inventory manager is the glue that connects all the departments and as such, they must have an understanding of sales, marketing, accounting, customer service and employee training.
The planning system is also vitally important to support optimal inventory management and technological implementation, requiring visualising business goals and recognising the role production and inventory play in achieving that. It also involves bridging the gap between future aspirations and where the company sits in their operational capabilities today.
The last, and equally important, support for inventory technologies we will mention is inventory management software. This renders the technology usable by providing the interface between technology, operator and manager.
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