The Future of Inventory Management

Inventory management takes both planning and execution. For decades, execution has relied on bar code data collection and wireless, system-directed material moves to exert better inventory control than paper-based processes can.

But, what if new types of real-time location system (RTLS) technology could bring about a constant digital awareness over inventory, while evolution of warehouse management system (WMS) solutions permits greater accuracy and on-the-fly inventory adjustments? Advances in these areas could help bring about a much tighter handle on inventory.

RTLS solutions span multiple technologies, including ultrawideband (UWB) beacons, Bluetooth low energy (BLE) beacons, as well as more traditional active and passive radio frequency identification (RFID). These technologies have existed for years and have continued to evolve, including new types of tags and readers.

For all these advancements, don’t expect the trusty bar code and inventory control functions in WMS to become less relevant. Most active tag technology is too pricey to place on low-cost goods at the each or even case level, so the sweet spot for much of the active tag technology will be in tracking assets like reusable bins or pallets, or perhaps lift trucks, other equipment or high-value goods.

“The lowest hanging fruit for RTLS right now is in gaining real-time awareness over pallet moves,” says John Sidell, founder of consulting firm New Course. “The benefit with RTLS is you can achieve better visibility over certain assets or inventory without scanning. In the right environment, you can have inventory visibility that is real time and fully dynamic.”

RTLS advances

Companies with supply chain operations may remember the high expectations around RFID in the early 2000s. A massive rollout of RFID didn’t materialize, though it has become increasingly used in retail stores to track high-value items like apparel.

This new era for RTLS is different. It’s more targeted and builds on advancements like UWB that can offer accuracy within 10 centimeters.

“There is certainly an increasing appetite for real-time location,” says Nathan Dunn, CEO of BlueCats, a provider of RTLS solutions. “As the name suggests, having that instant visibility of certain assets, which might include containers, vehicles or people, increases efficiencies not only by not having to search for things—it also creates an exciting foundation to continually monitor performance.”

Two considerations are key in determining if RTLS is a good fit, says Dunn. For one thing, the active tag needs to be able to physically fit on the things being tracked. Second, the value of tracking that asset or inventory in real time must outweigh the cost of the tag and supporting infrastructure.

In many industrial facilities, including distribution centers, time is wasted trying to locate items like reusable containers, says Dunn. “There is an economic value to not having to waste time locating assets or high-value materials,” says Dunn.

RTLS also generates a stream of data that can be analyzed for efficiencies, adds Dunn. Issues like excessive dwell time for pallets, containers or vehicles in certain areas can be monitored, and alerts generated. Any build-up of congestion in aisles or work areas can also be analyzed. “Over time, you can utilize a baseline of data to look at how to optimize workflows, with methods like heat maps,” says Dunn.

At Zebra Technologies, which provides multiple types of RLTS solutions, one fairly recent development is a new class of passive RFID readers that can hang overhead key work areas like receiving, shipping or crossdock staging to monitor movement of tagged pallets, inventory or assets like lift trucks. The reader is called the ATR7000. One reader can cover about 1,500 square feet and automatically gather data from inexpensive passive RFID tags, explains Mark Wheeler, director of supply chain solutions at Zebra. The sweet spot for much of the active tag technology will be in tracking assets like reusable bins or pallets, lift trucks, other equipment or high-value goods.

While not quite as pinpoint as UWB, notes Wheeler, passive RFID is accurate enough to discern if a load is being staged at the correct dock area or whether a lift truck has left or arrived at a crossdock area.

A key benefit of this type of reader, says Wheeler, is that it doesn’t require an operator to trigger an RFID scan or move a load through a narrow reader portal since the readers are stationed above each work area to be monitored. The end result, says Wheeler, is real-time visibility into how inventory or assets are moving.

“Bar codes area good for transactional visibility, but RFID provides for real-time visibility,” Wheeler says. “That’s a whole different level of visibility that an execution system can make use of.”

For RTLS to be more effective, a couple of key capabilities are needed, according to Premsai Sainathan, director of marketing with Roambee, a provider of real-time goods and asset monitoring solutions. One is to reduce the networking infrastructure that user companies have to put in place for RTLS, he adds. The other is actionable analytics.

With Roambee’s monitoring tag, which tracks location and condition factors including temperature, the communications infrastructure is embedded in each tag, says Sainathan. In 2019, Roambee partnered with T-Mobile so these tags can communicate data directly to the Cloud using T-Mobile’s Narrowband (NB)-IoT network service. This essentially sends the data straight from the tags to the Cloud in a dedicated lane of cellular service for IoT sensors.

“The sensors just need to be placed on the assets or goods you need to monitor,” Sainathan says. “It’s infrastructure-free, real-time tracking for location and condition, which allows you to scale up easily and go big across many facilities in days. The most important part of the solution, however, is the wealth of analytics the sensor data permits.”

RTLS analytics are evolving beyond the “where is my asset” question to looking at operational adjustments, says Sainathan. For example, if some perishable goods go out of temperature range, or a shipment of high-value goods is split during transit, analytics can point to the best adjustments. “The question we are focusing on is ‘what should I do for my business operations—knowing in real time of any changes in location or condition of goods and assets?’” says Sainathan.

The WMS factor

WMS has long used wireless bar code scanning and system-directed activity to exert control over inventory, but there are holes in that visibility. You have lag time since the last scan, and users can make errors or run across inventory shortages. WMS solutions need to be better at dynamic inventory control. Workers can get on-screen visual cues from the WMS to cut errors and increase inventory accuracy.

RTLS can potentially payoff for a DC by being deployed at key “choke points” such as receiving or shipping, says Doug Mefford, director of product management for Manhattan Associates, a WMS provider. However, he adds, WMS itself should be geared for easy, effective inventory adjustments.

For example, says Mefford, Manhattan has developed a user interface (UI) approach that streamlines inventory lookups and makes it easy to set up cycle counts, place inventory on hold, or trigger reslotting, all while walking the floor rather having to return to a PC in an office. For example, a supervisor walking the floor might see a “license plate” that has fallen off a load or container and needs to find out where that inventory should be. “The ability to support better ad-hoc management of inventory while on the floor as well as many other activities was really the desired outcome [of our UI approach],” says Mefford.

Richard Stewart, vice president of professional services for WMS vendor HighJump Software, agrees that today’s WMS solutions need to make it easy for users to dynamically manage inventory on the fly. When a user notices a shortage in a bin, the WMS should make it easy to trigger a cycle count, and perhaps put the inventory in that location on hold until the count is complete. In other cases, a user may want to trigger a cycle count because a location is down to just a few items.

These opportunistic cycle counts should be easy to trigger for authorized users, says Stewart. When combined with wireless bar code data collection and validation steps in the system, WMS remains the cornerstone of inventory management, Stewart believes. For third-party logistics (3PL) warehouse operations, a WMS also needs a range of other inventory management capabilities, such as the ability to define the same item differently for different clients, and accurately track space consumed for each client, or benchmark the amount of time a client’s inventory sits in a facility.

However, adds Stewart, RTLS holds potential to track concerns like the location of labor (people) and key assets, and for gathering temperature data for cold chain visibility. To date, he adds, HighJump’s exploration into RTLS has been on the “labor side” for issues like path optimization. “We’re utilizing beacons there to better focus on the traffic and the pattern optimization,” he says.

Long term, RTLS use in DCs is likely to see at least some use because of increasingly strict traceability regulations, says Bill Denbigh, director of product marketing for Tecsys, a WMS provider. As RTLS evolves, it should be able to reduce the labor that would otherwise be expended on traceability.

However, Denbigh says, a good WMS remains the foundation for inventory control. WMS can improve accuracy by directing workers on what items that need to be picked or replenished look like (pictures can be embedded on screen), and what the unit of measure or quantity should be. “If you consider how most picking errors tend to happen, it’s usually not about a worker being in the wrong place, but picking the wrong thing or the wrong unit of measure at the correct location,” says Denbigh. “Inventory accuracy has a lot to do with how good your WMS is at providing the right information contextually to the material handler.”

Co-existence

Going forward, RTLS may be justified for more DC operations at key choke points, even with WMS as the cornerstone solution. “Most warehouses have good standard operating processes and WMS capabilities to drive inventory accuracy and movement transactionally through the facility, so there may not be a need for real-time monitoring of on-hand values in every location,” says Medford.

As Dunn sees it, RTLS plays nicely with bar codes, since RTLS tags are often deployed at a vehicle or container level, with bar code scans offering a way to confirm load details or associate a tagged asset with load contents. “There can certainly be a happy intersection between the use of bar codes, passive RFID and RTLS,” says Dunn. “There is not going to be an overnight transition away from traditional scanning.”

Companies mentioned in this article:

• BlueCats
• HighJump Software
• Manhattan Associates
• New Course
• Roambee
• Tecsys
• Zebra Technologies