• Inventory Management
  • Supply Chain
  • Warehouse Management

Amazon’s Inventory Management Secrets

Written by Mark Gemberling
September 27, 2017

Amazon's Inventory Management Secrets are all about mobilizing workers with automation.The Amazon Effect has changed more than just consumer expectations. As the e-commerce giant has transformed retail and the world, it has also forced businesses to accelerate supply chain operations to keep pace with new evolutions, like two-day and same-day delivery.

So far, big-box titans like Walmart have been one of the few companies able to compete.

For those impacted by the Amazon Effect but not directly competing with Amazon, there are critical lessons to be learned from their continuous drive to innovate inventory management, warehouse automation, and the supply chain of tomorrow.

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Hidden Secrets to Amazon’s Success

Amazon is a giant in online retail. Digital Commerce 360 reports that Amazon generated $177.77 billion in 2019 alone, with 43% growth by Q2 of 2020 over the previous year. With the COVID-10 pandemic, revenue is set to outpace prior growth records.

The company gained this edge by relentlessly expanding operations, optimizing warehouse picking strategies and pushing delivery times beyond what was previously thought possible.

Conversations around Amazon warehouses often focus on high-tech solutions, from drone deliveries to autonomous robotic innovations. While Amazon is pushing boundaries in these areas, they aren’t for everyone.
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If you want to replicate Amazon’s success, look beyond the expensive sci-fi concepts to the proven strategies that underpin them. These three overarching warehouse inventory technologies can be adopted by any operation:

Digitizing Warehouse, Distribution, and Fulfillment Processes

“Businesses can leverage digital automation technologies to keep pace with shifting demand and uncertainty.”

Amazon warehouses feature extensive use of mobile barcode scanners and wearables. Mobile devices enable a near-constant cycle of order processing, item picking and shipping. Digitizing inventory processes allows Amazon to gain real-time visibility into stock levels, asset dispositions, and shipping demand at any given time.

Takeaway #1: Mobile barcoding increases visibility and accuracy.

Even Amazon is continually striving to optimize shipping practices. For example, in China, the company is partnering with merchants, allowing Amazon to pick up goods directly from those stores and ship to consumers locally. Even though Amazon has thousands of facilities across a global footprint, they know when, where and how much of each item they have at any given time. The key is rapidly capturing accurate material data with mobile data collection. This captures inventory movements as they occur, no matter where the work is located.

Takeaway #2: Collect rapid, high-quality data with mobile data collection.

Amazon transformed the supply chain by digitizing traditional warehouse processes to gain greater agility. What started as using barcode scanners to track inventory has evolved to a fully digital warehouse, distribution and fulfillment network that moves goods between locations with incredible efficiency. Going digital sets the foundation for a flexible, fast-moving modern operation. However, a digital enterprise is only effective if its data is accurate. Focusing on inventory accuracy has allowed Amazon to make dramatic strategic changes critical to its success.

Takeaway #3: Inventory and data accuracy is key to a successful digital supply chain.

Supply chains can learn a valuable lesson from this new idea of fulfillment. Instead of having to process the order in a central warehouse and send it over an extended shipping network, the e-commerce giant can pair a warehouse with an order to identify which location makes the most sense and accelerate order delivery accordingly.

This type of strategic change is only possible, however, because of data collection technologies and mobile inventory. Real-time integration with the central and multi-tier backend system, like an ERP or WMS software, ensures accurate information across geographically distributed locations.

A mobile warehouse is an agile warehouse.

Takeaway #4: Live mobile inventory control connects multiple facilities in a unified supply chain.

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Gaining Resiliency Against Uncertainty

One crucial reason for Amazon’s continuing success in the pandemic era is its solid digital foundation. High-quality real-time inventory enables the massive enterprise to act on accurate data trends during a time when supply and demand are unpredictable. Greater predictability and resiliency can be gained by any enterprise. Mobile automation and a mobile supply chain are cost-effective means to achieve this.

Supply chain software solutions range from basic wireless barcode software all the way to advanced warehousing technologies, like WMS-lite and intelligent picking. Whatever solution you choose, be sure to establish a modern automated data and identification capture system, or AIDC, to ensure perfect data accuracy for your ERP. Mobile inventory apps and hardware can then extend that functionality to wherever your people work.

Takeaway #5: AIDC automates the capture of flawless inventory data for your ERP.

Additional Advanced Inventory Tips

Transforming your inventory processes can be a challenging task. Before you can start solving problems with inventory management, first you need to dial in on why and where you are having issues. Explore some of our additional inventory management tips and best practices below: