In the modern commercial world, picking and packing is a ‘business critical’ activity, though at first sight it may seem a little dull. Storage, packaging, cardboard boxes and arranging transport don’t immediately sound the stuff of Hollywood, celebrity status or luxury lifestyles.
But let’s drop a few names to help change your mind: Elon Musk and Tesla, Jeff Bezos and Amazon. Order fulfilment is a crucial part of inventory management at these global stars.
The financial importance of planning, organising and controlling the flow of goods and materials through supply chains cannot be under-estimated. Effective inventory management can help logistics organisations to:
• Reduce costs
• Improve customer service
• Increase profits
• Minimise waste
• Improve efficiency
• Meet regulatory requirements
Fines and losses for companies who fail to control their inventories can cost millions of pounds.
The Competition and Markets Authority (CMA) is the UK's independent competition authority. It is responsible for ensuring businesses compete fairly and do not harm consumers. The CMA has the power to investigate inventory management at businesses and to take enforcement action, including fines.
Sports Direct and Boohoo were fined after the CMA found the companies held excess inventory which led to losses of £120m and £25m respectively. The CMA also found both companies had failed to comply with the Consumer Rights Act 2015, which requires businesses to provide accurate information about the availability of goods.
Other inventory management problems that made bad news headlines:
The global supply chains’ and logistics crisis made news across the world when ports and shipping ground to a halt during the Covid pandemic. Inventory management is undergoing major transformation to reflect a shift to a ‘just-in-time’ model of market organisation, requiring more globalisation, automation, digitalisation and sustainability.
This supply chain crisis also offers some opportunities and benefits for those who can plan and execute effectively. Here are some possible strategies that businesses can adopt to benefit from the crisis:
Leverage data and technology: Businesses can use data and technology to gain more visibility and control over their supply chains, optimise their inventory and demand planning, improve their logistics and transportation efficiency, and enhance their customer service and satisfaction. For example, they can use artificial intelligence, cloud computing, blockchain, internet of things, and digital platforms to monitor, analyse, and automate their supply chain processes.
Diversify and localise sources and markets: Businesses can reduce their dependence on a single or few suppliers or markets, and explore alternative or multiple sources and markets that are more resilient, reliable, and cost-effective. For example, they can source from different regions or countries, use different modes of transport, switch to domestic or regional suppliers or customers, or develop new products or services that cater to local needs.
Collaborate and co-operate with partners: Businesses can work together with their suppliers, customers, competitors, and other stakeholders to share information, resources, risks, and opportunities. For example, they can join industry associations or networks, form strategic alliances or partnerships, participate in joint ventures or co-creation initiatives, or engage in social responsibility or sustainability projects.
Innovate and adapt to the changing environment: Businesses can embrace change and uncertainty as a source of innovation and adaptation. For example, they can adopt new business models or strategies, create new value propositions or competitive advantages, develop new capabilities or skills, or transform their organisational culture or structure.
There is no one-size-fits-all solution for every business. Each business needs to assess its own situation, goals, strengths, weaknesses, opportunities and threats, then design and implement a customised plan that suits specific needs and circumstances.
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UK Pick and Pack works with global, national and local companies, providing third-party logistics (3PL) solutions for inventory management, as well as other supply chain elements including warehousing and shipping. Utilising industry-leading software such as Mintsoft, UK Pick and Pack provide safe, cost-effective, reliable and efficient inventory and wider managed logistics solutions.
Call our experts on 01903 791211 to discuss your business requirements, or send us details of your enquiry via our contact form or email address.
