Many businesses begin supply chain inventory optimization by optimizing how they track materials. In fact, implementing a proven inventory management strategy is often the first step to a leaner and more nimble supply chain.
What is supply chain inventory optimization?
What is materials tracking?
In inventory management, material tracking refers to the strategy of monitoring and recording the whereabouts and consumption of materials. Such materials may be raw materials, work-in-progress inventory, and finished goods.
Typically, if an organization is concerned about supply chain optimization, it has reached the point where a manual (also known as a pen and paper) inventory system is no longer adequate. These organizations have since adopted, at the very least, a spreadsheet inventory management system. Most often, organizations concerned with supply chain optimization are either considering or have already implemented an inventory management software system.
This is chiefly because modern inventory management software systems like Sortly offer automation features such as barcoding and QR coding. These features enable real-time and accurate inventory management, unlocking optimized supply chain transparency.
How to optimize a supply chain with materials tracking
The first steps to optimizing a supply chain begin with a solid materials tracking strategy. The following steps will help most organizations start that process immediately.
1. Select an inventory management system to track materials
When the desired result is a truly optimized supply chain, most organizations should consider inventory management software with barcode and QR code capabilities.
Selecting inventory management software that allows your team to check items in and out with an in-app barcode and QR code scanner makes it much easier for your employees to practice perpetual inventory. Perpetual inventory occurs when inventory levels are continuously updated as materials move through your organization and, possibly, the other organizations in your supply chain.
Even if other partners in your supply chain are not willing to participate in materials tracking alongside your organization, tracking the whereabouts of your inventory and how its usage fluctuates is essential to practicing solid inventory control and making good predictions about how much inventory you’ll need in the future.
2. Automate tedious tasks
Another way to optimize your supply chain through materials tracking is through the use of modern technology that automates manual inventory tracking tasks. From low stock alerts sent by your inventory management software to the assistance of drones and artificial intelligence, your business can free up time for employees to focus on more challenging activities.
This can assist with both materials tracking and broader supply chain optimization. After all, when the easiest and most frustrating tasks on your list are being performed by technology, your organization’s best and brightest can put their heads together to focus on bigger-picture challenges that will help your business become more efficient and profitable.
3. Increase supply chain transparency
Finally, optimize your supply chain by increasing transparency between your partners. Talk to your suppliers and see if they want to collaborate and share materials tracking data with you. If you can gather at least some data, you will enjoy more visibility into your supply chain than before.
Of course, not all vendors will be willing to share every single detail of their supply chain with you. While some transparency is necessary for financial, ethical, and environmental reasons, a vendor may decline to share their materials tracking data with you. If so, it is still possible to increase supply chain optimization by having regularly scheduled conversations with your vendors.
Your suppliers have unparalleled insight into what’s affecting their own manufacturers and transportation providers, along with unique opinions about changes in the market and fluctuations in demand. Talk to these providers and see if any of these insights can help you make better decisions for your business.
Related: Why Supply Chain Traceability Matters
What are the benefits of materials tracking for supply chain optimization?
There are various benefits unlocked when an organization begins to track materials—regardless of its supply chain optimization goals. That said, there is a unique set of rewards enjoyed by businesses that desire a more reliable and agile supply chain. Such benefits include:
1. Identifying vulnerabilities sooner
When a business has a better handle on its inventory and how its supply chain operates overall, it will recognize vulnerabilities and inefficiencies within its operation much sooner. The same goes for illogical warehouse procedures, outdated protocols, and other strategies that make a business less productive.
2. Forecasting demand better
Another chief benefit is that by combining internal and external data, your organization is likely to make more accurate predictions about future customer demand than ever before. This is partly because perpetual inventory management leads to new and highly precise insights about inventory needs. With the help of your supply chain partners, you’ll have instant access to hard and soft data about what’s next for your industry.
3. Getting more out of technology
Finally, businesses seeking to improve supply chain transparency via materials tracking will likely enjoy a better return on investment in technology. That’s because the most cutting-edge technologies offer a host of automation features that provide even more benefits when an organization is committed to using that technology daily.
To ensure such technology does not become overwhelming, search for products that are as modern and promising as they are intuitive and user-friendly. After all, unlocking the benefits of a transparent and optimized supply chain is impossible if your organization’s team cannot or will not utilize the technology in the long run.
About Sortly
Sortly is an inventory management solution that helps you track, manage, and organize your inventory—from any device, in any location. We’re an easy-to-use inventory software that’s perfect for large or small businesses. Sortly builds inventory tracking seamlessly into your workday so you can save time and money, satisfy your customers, and help your business succeed.
With Sortly, you can track inventory, supplies, parts, tools, assets like equipment and machinery, and anything else that matters to your business. It comes equipped with smart features like barcoding & QR coding, low stock alerts, customizable folders, data-rich reporting, and much more. Best of all, you can update inventory right from your smartphone, whether you’re on the job, in the warehouse, or on the go.
Whether you’re just getting started with inventory management or you’re an expert looking for a more efficient solution, we can transform how your company manages inventory—so you can focus on building your business. That’s why over 10,000 businesses globally trust us as their inventory management solution.
Start your two-week free trial of Sortly today.
