How to Automate Supply Chain Inventory Management

Managing a complex supply chain with thousands of SKUs can be a major challenge, often leading to issues like expedited orders, duplicate orders and unexpected inventory levels.

Think about the number of SKUs your business handles. The average company handles 500 to 1,000 SKUs and sometimes tens of thousands of items, which requires a lot of juggling for merchandisers, planners and transportation teams.

For many, the questions they answer when managing fulfillment, forecasting and replenishment are simply: “What do I need?” “Who can I get it from?” and “How soon can I get it?” These are logical approaches to managing vendor orders within your supply chain, but they can be inefficient and leave performance — and your success — to chance.

Issues With Vendor Order Tracking

Orders from vendors are often some of the hardest to track in your supply chain. Relying on disparate data sources and carrier updates while navigating the sheer volume of inbound orders can mean disaster when managing exceptions. This is what that can look like:

• High frequency of expedites: You find yourself needing to expedite critical SKUs due to shorted orders or late notification of an exception.
• Duplicate orders: An inability to track vendor orders results in a gap in forecasting, which results in duplicate orders.
• Unexpected trailer contents: Crews expect a trailer to contain certain goods, only to open it and find that the goods are in a completely different order or that items are missing.
• “Dark” trailers in the yard: SKUs are showing out of stock while a trailer full of the needed items is sitting on-site but there are no plans to unload.

Each of these issues can be a blow to your business, including lost sales, disappointed customers and excess supply chain spending. It’s time to break the habit.

Improving Vendor Order Tracking

Since supplier-managed orders can have a significant impact on success, it is incredibly important to track and manage order-level exceptions. The issue with relying on updates from your vendors or their carriers is the lack of order-level information. The ability to ask, “Where is this specific item?” and “When will it arrive?” and get a real ETA and a summary of all items in transit is a difficult task that usually requires a lot of manual effort.

This tactical approach to managing orders and items within your supply chain still doesn’t solve expedites, lost cargo and late notice of exceptions.

Companies that make the right investments in a single source of truth, capable of cross-platform integration, are breaking free from the tactical management of inbound orders, employing strategies that include:

• Integrating vendor networks into their visibility solution — using an order tracking system that can easily integrate with vendor supply chains for a holistic view of your network
• Managing vendor order exceptions — providing proactive notification of both the ETAs and fill rate for orders, providing advance notice of potential delays or short-filled orders
• Tracking yard-level inventory — determining whether or not a needed SKU is sitting in a trailer on-site and creating a move task to unload

These strategies help build resilience into your inbound network by combining proactive alerts and aggregated supply chain visibility to avoid potential stockouts.

Automation to Avoid Disruption

Proactive insights help avoid problems, but they still require manual intervention from your teams. The real value comes from a solution that can detect and solve an issue without human intervention.

This type of automation needs a few critical components to succeed:

• Warehouse Management System (WMS) integration to track inventory levels
• Yard Management (YMS) integration to orchestrate and track the logistics park yard
• Order-rich real-time transportation visibility (RTTV) for exception monitoring and SKU-level details

Imagine a scenario where your supply chain knew when a critical stockout risk was imminent and automatically looked for the best inventory options — either in the yard, in transit, or from the best-suited supplier. What kind of freedom could your teams experience knowing that inventory-led fire drills were taken care of?

The reality is this type of automation is very real. By using a centralizing platform like FourKites, which can ingest and analyze key data feeds from across your supply chain operating tech stack, shippers are able to automate how they respond to critical and unplanned inventory shortages today.

Ending Supply Chain Budget Leaks

Order management within the supply chain, both pre-shipment and in-transit, creates hidden issues that can become a serious drain on your supply chain budget. It’s time to put an end to it.

Taking advantage of next-generation technology that sheds light on vendor-controlled freight is imperative for supply chains. With reduction mandates for inventory carrying costs, the number of vendors, inventory levels, and general supply chain budgets — having the tools required to maintain performance is key in avoiding even costlier expenses, such as OTIF fines and expedites.

With thousands of vendor-controlled orders tracked throughout their entire lifecycle, FourKites is an expert at helping businesses rein in supply chain dark spots. With the tools to both uncover hidden inefficiencies and set solutions in motion automatically, shippers can take back control of their supply chain and move confidently towards a leaner way of operating.

To find out more, contact us at [email protected].