The Future of Inventory Management


Have you ever wondered how any store knows whether it has an item or not? Inventory counting is essential for delivering the right items at the right time to the customers and for accurate accounting. Although ~80% of warehouses count inventory manually, this is slowly being replaced by automation. One of the most fascinating innovations is the possibility of using drones and other high-tech technologies to completely remove humans from the counting process.


What are typical types of inventory counting? 

  1.     Wall-to-wall inventory counting: all items in the warehouse are counted from wall to wall. Unlike the method that follows no exceptions are made. To achieve this, all operations are temporarily stopped. This type of counting can be done multiple times a year or in blocks of time (such as monthly or quarterly). Due to the impact on revenue, this method is used only once or twice a year when business is at its slowest. The lack of continuous check of inventory can also lead to unidentified storage errors and even fraud.
  2.     Perpetual inventory counting (also known as “cycle counting”): inventory records are continually updated. This method increases accuracy and allows you to continue operations while counting. However, periodic physical inventory counts are still necessary since recorded inventory may not reflect actual inventory as time passes. Also, initial cost of implementation is higher due to specialized equipment and software.


Advantages of increased automation 

  •       Data errors during manual counting eliminated
  •       Real-time updates of inventory items
  •       Getting closer to 100% accuracy
  •       Faster counting
  •       Lower long-term costs 
  •       Rapid return on investment


State of automation in warehouses today

Most warehouses are partially automated, as they use barcode or radio frequency identification (RFID) to scan items into the warehouse management software. 

The unique code found in the barcode helps track the item. Barcode scanning is generally done using handheld scanners which means that this is a labour-intensive solution. 

RFID scanning is faster than barcode scanning since no visual line of sight is needed for it to work. Yet, RFID-based scanning is not as common as barcode scanning because installation and RFID tags are more expensive. Moreover, the readers and tags are not always responsive due to the signal interference between two tags or two readers. 


Full automation?

Although RFID and barcode technologies are a massive improvement over manual counting, they still rely on labour-intensive manual scanning processes. Currently companies are investigating technologies to automate the inventory counting process completely. 

One such technology is drone-based scanning. This involves drones flying autonomously through the warehouse aisles while scanning the inventory in different locations. Once a flight is completed, the drone can be recharged automatically in one of the docking stations placed in the warehouse. In this way, the need for human intervention is completely removed, and counting can be done outside of operating hours. Inventory counting with drones hence does not interfere with main operations. 

In most cases, the drone uses an on-board barcode scanner to count inventory. However, this is a limitation since only full pallets are being scanned. Partially picked pallets and occluded barcodes are not picked up by the scanner. This problem can be solved by using advanced computer vision algorithms. Then cameras with artificial intelligence and 3D reconstruction detect and process the inventory visually.

The result is that inventory counting is fully automated with stacks of products being counted in a fraction of the usual time. In addition, the products’ shapes and appearances may also be checked. Any damages are detected before the item is shipped further in the supply chain.

Mobile smart cameras are not only limited to drones. They may also be integrated onto existing warehouse vehicles. In this way, the vehicles count inventory real-time during their normal operations. Data processing is also done on-board, limiting demands on the wireless network.

As industry 4.0 is taking off worldwide, this technology is going to become more popular globally in the coming years. Since it gives a significant competitive advantage in terms of costs, time and accuracy, it is important to follow upcoming trends such as this one closely.

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