Can app-based inventory technology boost efficiency, productivity and profit? Here’s what the data shows.
Who is this whitepaper for?
This paper is for any business that carries inventory in stores or vans. That includes manufacturers, housing associations, contractors, facilities management businesses and utility companies.
If you want to cut costs, improve customer service and get more jobs done each day, this is for you.
The challenges of Inventory Management
Inventory management comes with real challenges. Many businesses can’t see what materials they’re using. Stock sits in multiple locations, often untracked. Replenishment only happens after something runs out.
A Shift Towards Smart, Connected Inventory
Smart hardware and app-based inventory technology are changing how businesses manage stock, giving them better visibility and efficiency than ever before.
Keeping track of stock levels can be challenging, particularly when stock is held at separate locations. For example, inventory may be in various areas of a large store or divided between several regional stores. With app-based systems, businesses can track their live inventory system in real-time. Ensuring that stores’ inventory levels are always accurate and up to date. This eliminates the risk of overstocking while optimising inventory turnover.
Managing Inventory Across Fleet Vehicles
Service providers often store stock across a whole fleet of vans. That makes it hard to track and even harder to spot when too much (or too little) has been ordered.
Many businesses still rely on manual processes. That means more errors, more inaccuracies, and a clear case for modern inventory technology.
The Reality: Many Businesses Still Lack Inventory Tracking
In a recent article, Finance Online confirmed, ‘It’s alarming that many businesses, particularly SMBs, are still not utilising inventory management systems for operations. Moreover, some don’t even have a way to track their inventory.’
Inadequate inventory management results in delays and time wasted on jobs that cannot be completed efficiently due to unaccounted for stock-outs. Stock-outs can result in high emergency delivery or collection costs, just to enable a job to be completed, as well as an increased risk of costly production downtime.
Other inadequacies with inventory management result in delays, inaccurate invoicing, and poor cash flow, which leads to excessive spend or overconsumption of some materials. According to IHL Group, ‘the estimated value of global inventory distortion among mass merchants and grocery retailers in 2020 is $176.7 billion for overstock and $568.7 billion for out-of-stock.’
Why App-Based Inventory Management Systems Are Replacing Traditional Methods
Spreadsheets, paper, and stand-alone systems can’t deliver the inventory accuracy and supply-chain visibility it takes to stay competitive in the digital world. In addition, traditional inventory management methods are often time consuming and prone to errors. Innovative hardware partnered with app based solutions are the future of inventory management.
Increasing Supply Chain Complexity Is Driving Mobile Inventory Management
App-based store and van stock management systems are becoming more popular as supply-chain logistics become more complicated, and customers become increasingly demanding.
‘Companies can reap a 25% increase in productivity, a 20% gain in space usage, and a 30% improvement in stock use efficiency if they use integrated order processing for their inventory system.’
Advanced mobile applications allow companies to manage their inventory and supply chains effectively. These systems efficiently record every scan and every movement of inventory and are designed to prioritise inventory accuracy, cost reduction, and charge capture through job number management.
Businesses spend a significant amount of money on financing and stocking their inventory and it’s important to optimise this inventory to remain competitive. With extended lead times due to the pandemic, companies are having to invest more capital in inventory to ensure supply to customers.
Increasing Inventory Investment Is Driving Demand for Better Inventory Management Systems
The numbers tell their own story:
- 61% of supply chain leaders are increasing inventory of business-critical products to boost resilience (McKinsey)
- Inventory distortion cost retailers nearly $1.8 trillion globally in 2020 (IHL)
- Global inventory distortion in 2020 totalled $176.7bn in overstock and $568.7bn in stock-outs (IHL)
Store and van stock management is being revolutionised with the use of inventory and supply-chain management apps on mobile devices. However, not all app-based inventory management systems are the same.
It is essential that the inventory management solution a business chooses has the functionality required to enhance the operations of the business
Leading-edge app-based Inventory Management systems:
- Make use of the best technologies to manage the process
- Can be used on specialised, rugged Android devices, such as Zebra and HandHeld, which utilise both laser barcode and Near Field Communication (NFC) capability
- Utilise technology that speeds up the process of managing inventory
- Are easy to use for operatives – the more intuitive the app, the easier it is for widespread adoption of the technology within a business.
The store is at the centre of all operational activity, responsible for stocking and distributing supplies such as tools, equipment, personal protective equipment (PPE), and supplies to employees, enabling them to fulfil their business requirements.
It is therefore essential that the inventory management software a business chooses has the functionality required to enhance the operations of the business.
Critical Issues in the Automated Replenishment Process
Management of Unit of Measure (UOM)
Unit of Measure (UOM) matters more than people think. Stores usually issue items individually — one item, one pack, one metre. But suppliers want to reorder in bulk, like a box of 200.
The right software handles this conversion automatically, so there are no errors in the replenishment process.
The integration with distributors is important in reducing inventory carrying costs and improving customer service.
Options for ‘unstaffed’ storerooms
When selecting an inventory software solution, businesses should think carefully about both the current state of their storeroom operations and what their ideal future state would be. For example, SmartStores, by iNVENTORe, is often used in a staffed store during the day, but can also be used in unstaffed stores, with night-shift engineers issuing their job requirements while still maintaining stock accuracy. Some of our customers have also moved to completely unstaffed stores with SmartStores.
Offline capability
Despite best intentions, technology can sometimes run into issues and ways to minimise the impact on operations needs to be found. Offline capabilities are a critical feature of any store and van stock solution that allows you to store inventory data locally during a disruption in connectivity.
Integration with distributor systems
It’s important that distributors are onboard and convinced by the effectiveness of the technology for their customers, and also that the automated replenishment is seamless into their enterprise resource planning (ERP) systems. This ensures the whole supply chain supports the technology and the new process. This is one of the reasons that iNVENTORe has a distributor policy: Wolseley being our exclusive UK distributor in the plumbing sector for Facilities Management (FM), and Rexel our UK exclusive distributor in the electrical wholesale sector for FM. The integration with distributors is important in reducing inventory carrying costs and improving customer service.
Advantages delivered by leading-edge Apps
Automated material replenishment
Optimised inventory levels can be maintained through automated restock triggers communicated directly to distributors and suppliers. The manual process of cycle-counting stock levels each time inventory needs replenishing is successfully eliminated by leading-edge apps.
Every transaction is recorded. Demand signals are sent to the right supplier automatically, based on how each location is set to replenish. The result: no more stock-outs, no excess purchases, and consolidated orders through your chosen suppliers.
Distributors of SmartStores and SmartVan confirm that their customers’ operatives are completing, on average, an additional two jobs per day as a direct result of implementation.
Improved customer service through improved completion rates
Leading-edge app-based inventory management systems offer businesses advantages with efficiencies in customer service by offering an automated solution to track, record, and reorder all materials and tools necessary to complete a job the first time.
Real-time inventory capability across multiple stores and fleets enables:
- Smarter scheduling decisions
- The avoidance of costly downtime spent chasing materials
- The ability to eliminate maverick purchasing and unnecessary trips to merchants and distributors
- More jobs to be completed per day by operatives
Case study: Rexel and Queen Alexandra Hospital, Portsmouth
The Queen Alexandra Hospital, Portsmouth is one of the largest acute teaching trusts in the UK.
iNVENTORe distribution partner, Rexel, worked with the hospital to overhaul their entire inventory management process using the SmartStores app-based inventory management system, which has resulted in the hospital achieving compliance levels in excess of 98% against their KPIs.
The problem
Before Queen Alexandra Hospital implemented SmartStores they were taking an irregular, paper-based approach to inventory management. Stock stores were staffed during the day, but not during evenings or weekends, and were accessed by multiple engineers leading to poor stock management and stock being used but not accounted for when re-ordering.
Stock-outs were a regular occurrence, with engineers failing to complete jobs on time due to the parts they needed being unavailable. This resulted in wasted time through them going off-site to buy what they needed and being assigned to jobs that they couldn’t complete.
The company was being fined heavily by the NHS for failing to meet requirements, and it needed a reliable solution that would support the needs of the hospital while saving on time and cost.
The immediate impact
With SmartStores in place, Queen Alexandra Hospital now has a system that identifies the 5,000+ products it stores. Engineers have the ability to find the part they need, scan the items quickly, assign them to a job number and feel assured that the inventory will be reordered automatically for future use.
The wider impact
The Queen Alexandra Hospital now has a reliable app-based inventory management system with a live feed of which items are in stock and a full audit trail of transactions. Stock-outs have reduced drastically since the implementation of SmartStores, resulting in significant improvements in both staff and time efficiency as well as reducing unnecessary costs.
With the rapid reduction in stock-outs, they have also substantially reduced the fines they were having to pay as well.
Case Study: Wolsley and Livv Housing
Livv Housing Group is an independent housing association, providing affordable, quality homes for around 25,000 people, through nearly 14,000 properties in Knowsley, Merseyside.
The problem
Livv Housing Group previously had no system to efficiently and accurately track stock held in their van fleet. Engineers had no knowledge of inventory levels or the cost of inventory on their vehicle. They also had no way of knowing if they had the products they needed for the job they had been assigned to do.
Engineers were wasting time being sent to jobs they didn’t have the correct parts for and were taking multiple visits to trade counters to purchase items not stocked in their vans, resulting in lost time and overspend. There was also the problem of them not being able to complete a job first time because of the lack of correct stock in their van.
The immediate impact
With SmartVan in place, engineers are not only able to have an immediate view of the stock held in their own van, which enables them to successfully complete a job, but the central operational team at Livv Housing now has a real-time inventory of the stock held in each van. The direct result of this being that the right engineer can be sent to the right job with the right parts.
The wider impact
Livv Housing Group now has an efficient, automated system for managing the inventory held in their van fleet. The number of repairs being completed per day has increased, due to engineers having the right parts to complete the job in their vehicles. And their first-time fix rate has also increased.
The time and financial costs of visiting the trade counter has significantly reduced, as has time spent on ineffective, manual inventory management processes.
Better yet, Livv Housing report a culture change within the business, with engineers taking a greater sense of ownership and responsibility for managing the stock in their own vehicles, as well as reporting a positive environmental impact and saving on fuel, due to the reduction
Sustainability
Sustainability matters more to businesses than ever. In an Oxford Economics survey, 73% of consumer product company executives said sustainability was a major concern at every stage of their supply chain — from planning through to delivery and maintenance.
- Optimisation of the replenishment process: unnecessary trips to merchants are eliminated as items are automatically reordered on the local branch when required
- Operatives can check the stock of other vans and central stores to check inventory availability, saving wasted journeys
- Stock visibility across the fleet of vans enables smarter scheduling of jobs and ensures operatives only visit properties with the correct materials for job completion
- Ensuring assets such as power tools are not left behind on a job with the use of an app-and-assets tag prevents operatives from turning up to the next job without the tools to complete it, as well as preventing wasted journeys searching for lost assets.
In order for a business to be sustainable, it is essential to know where every item is in real-time. When businesses do not have this information, they will experience overstock and out-of-stock situations, which result in excessive use of transportation and associated resource waste, less efficient use of storage space, and reduced customer-service levels.
The recent introduction of the SmartVan app into a managed inventory service across a fleet of vans significantly lowered unnecessary and unproductive journeys, saving time, money on fuel and also lowered the business’s carbon footprint.
App-based inventory technology improves efficiency, productivity and customer service. The result: less churn, less waste, and more profit.
Stuart Axtmann, SmartStock Solutions Manager at Rexel, points out that the role technology plays is not to replace the jobs of store managers or purchasing managers, these roles are needed, it’s about giving the people responsible for these roles their time back to focus on ‘business critical activity, not the drudgery that the tech can remove.’7
How iNVENTORe can help with our mobile optimised App solutions: SmartStores and SmartVan
Easy-to-use mobile application
The SmartStores and SmartVan Inventory apps enable the management of inventory via a smartphone. This eliminates paper-based processes and enables businesses to instantly update inventory, in real-time, as transactions are performed.
A full suite of transactional capabilities captures material usage against job numbers, even without a cellular service, including the functionality for laser barcode scanning on specialist, rugged Android devices and contactless NFC.
Reorder levels and minimum stock levels allow monitoring of inventory to predetermined states. This means that products don’t have to be ordered every time the app is used. For example, if a van holds ten batteries it can be restocked when it’s down to its last four, while the main warehouse holds 1,000 batteries and is restocked when the level falls below 400.
SmartStores can translate clock cards straight into the app at the trade counter, allowing all issuance and return transactions from a store to be seamlessly recorded against each operative. This adds a level of control and accountability across business and is particularly useful when managing many people across multiple stores.
Mobile/cloud technology
The SmartStores and SmartVan app-based inventory management systems are mobile and cloud-based technology, meaning that no supporting software is required to successfully use the apps. The architecture and quality of the cloud-based platform that aggregates the data from the van and stores management apps provide real-time visibility and control of inventory.
Real-time visibility and control through leading-edge cloud-based software, Sourcerer
The iNVENTORe cloud-based software, Sourcerer, is a leading-edge platform that is fully scalable and has the capability to manage multiple suppliers in the supply chain into numerous stores regardless of geography. It can also manage the inventory and assets across van fleets. As inventory is depleted in a store, or van, it is automatically ordered from the appropriate supplier or can be set up to order from a central store, with the store generating the requirements for the supplier as inventory is depleted.
SmartStores and SmartVan reduce carrying costs, avoid excess purchases and increase the number of jobs that can be completed per day.
Real-time inventory visibility means operatives can see exactly what inventory is on hand across an entire business, including all warehouses, storage areas and vans. The SmartSearch facility allows operatives to scan an item’s barcode or NFC tag, or select an item from a search to display stock quantities across all stores and vans (by registration number).
Robust and easy-to-use reporting
Reports deliver all inventory data to help managers identify trends, opportunities, and issues that need to be addressed. Many inventory management systems have reporting capability, and when deciding on the right solution for your business it’s recommended that example reports from the system are reviewed to ensure the format, report type and available customisations will fulfil the business’s requirements.
With modern mobile technology linked to the cloud, businesses have the ability to create, manage and view customised reports against KPIs.
Return on Investment (ROI) through improved efficiencies
SmartStores and SmartVan reduce carrying costs, avoid excess purchases and increase the number of jobs that can be completed per day through:
- Tighter controls for issuance and tracking of all inventory transactions to provide a clear audit trail down to the employee, job, or customer
- Real-time visibility of the inventory in every van, and in every warehouse or stockroom, that enables items to be found quickly and easily by browsing, searching, or scanning the barcode or NFC tag
- Charges that are captured against specific job numbers to ensure the inventory consumed is applied to the correct job: any items returned to the van and job are automatically deducted from the job’s cost
- Integration to distributors, which offers seamless replenishment of inventory.
Enhance Inventory Management with complimentary solutions
SmartStores and SmartVan apps work with other iNVENTORe solutions that further enhance control and security of inventory. These include:
- Smartie asset tags
- iBinScale (a battery-powered weight sensor bin)
- SmartStores Secure, a metal lockable cabinet accessed by the SmartStores app.
Ready to Modernise Your Inventory Management?
iNVENTORe has been designing and deploying point-of-use inventory management solutions since 2001, with patents in some of the most innovative technology in the sector. From a single industrial vending machine to an enterprise-wide deployment across multiple sites and vehicle fleets, solutions are scalable, fast to implement, and built for real operational environments.
Sources
1. ’97 Supply Chain Statistics You Must Know: 2021/2022 Market Share Analysis & Data’, viewed 21 March 2022, https://financesonline.com/supply-chain-statistics
2. ’Disrupted Retail – How the Pandemic Exposed Retail’s Hidden Inventory Distortion’, viewed 21 March 2022, https://www.ihlservices.com/product/disrupted-retail/
3. EasyPost, 2019, ‘Top Reasons to Automate Your Fulfillment Operations with EasyPost’, viewed 21 March 2022, https://www.easypost.com/blog/2019-02-25-top-reasons-to-automate-your-fulfillment-operations-with-easypost
4. McKinsey, 23 November 2021, ‘How Covid is Reshaping Supply Chains’, viewed 21 March 2022, https://www.mckinsey.com/business-functions/operations/ our-insights/how-covid-19-is-reshaping-supply-chains
5. ’Anyone See Canada? Retail’s $1.8t Inventory Distortion Issue’, viewed 21 March 2022,
https://www.ihlservices.com/product/inventorydistortion
6. ’The Sustainable Supply Chain Paradox’, viewed 21 March 2022, https://www.sap.com/cmp/dg/sustainable-cp/index.html
Interviews
7. Axtmann, S, SmartStock Solutions Manager, Rexel, interviewed by Inventor-e on 28 February 2022.
8. Harnick, A, Regional Sales Manager – Managed Services, Wolseley, interviewed by Inventor-e on 28 February 2022.
