This article first appeared in Digital Edge, The Edge Malaysia Weekly on July 22, 2024 - July 28, 2024

The challenges of maintaining optimal stock levels have plagued businesses across sectors like retail, food and beverage (F&B) and fast-moving consumer goods for some time. Factors such as seasonal demand fluctuations and the absence of real-time data for accurate forecasting often lead to understocking, negatively impacting business performance and customer satisfaction.

According to the Organisation for Economic Co-operation and Development (OECD) D4SME survey, “SME digitalisation in 2024: Managing shocks and transitions”, small and medium enterprises (SMEs) perceive significant benefits from the adoption of digital tools that improve productivity, and one such tool is automation (40%).

This underscores the importance of utilising technology for successful business endeavours, with automated inventory restocking systems being a pivotal starting point as we continue to see the return of offline shopping, driven by shoppers' need to connect with brands and products in person.

An inventory management trend to look out for in 2024 is cloud-based inventory systems and data-driven inventory management strategies.

These technologies can revolutionise the business-to-business (B2B) sector by addressing the absence of essential features in the restock space. For instance, the lack of tracking capability in the B2B restock landscape would result in the recipient's lack of awareness of the shipment’s arrival time and visibility of the products. The limited transparency can lead to inefficiencies in the restocking process and potential disruptions in the supply chain.

Therefore, it is crucial for businesses to leverage technologies in their B2B restock space to enhance their operational efficiency, which will lead to better inventory management. This, in turn, could lead to increased sales and a more competitive position in the market.

It is important to note that businesses with multiple outlets spread across diverse geographic locations often struggle to maintain consistent inventory levels. This can be due to myriad factors, including the logistics partners’ network coverage.

However, failure to order inventory on time can result in stock-outs, negatively impacting customer loyalty. Therefore, businesses should explore inventory restocking systems capable of managing inventory across all locations to ensure timely restocking that transcends national borders.

This expansive coverage will also enable businesses to engage with smaller retail customers located on the outskirts and expand their reach to untapped markets.

Efficient movement of goods is essential for businesses. A well-designed route is crucial in minimising both travel time and distance, ensuring that parcels reach their destinations promptly.

An inventory restocking system can play a pivotal role in optimising delivery routes, positioning hubs and stations at key locations, and tailoring transport methods to suit different types of shipments. This ensures that parcels can be quickly transferred from one point to another, further enhancing the speed of delivery.

Every business seeks cost-effective solutions that enhance efficiency, minimise errors and utilise data to maintain optimal inventory levels. Logistics can account for up to 15% of a business’ operational costs. This is where an inventory restocking system comes into play by using real-time data and predictive analytics to maintain inventory levels, automate order placements and prevent stock-outs that could result in lost sales opportunities.

In our fast-paced commercial landscape, businesses must remain agile and responsive to maintain a competitive edge.

Recognising this, the Malaysian government has launched the MSME Digital Grant Madani 2024 and allocated RM200 billion to incentivise industries to digitalise and automate operations. This initiative showcases the government’s commitment to fostering digital transformation among businesses.

In line with the government’s efforts to propel digital transformation, an effective strategy to navigate the market’s volatility is the implementation of an inventory restocking system that responds to shifts in the business environment and quickly adjusts stock levels accordingly.

Meanwhile, businesses require real-time visibility to monitor their supply chain, enabling them to make informed decisions and mitigate potential issues. Lack of visibility often results in inefficiencies and disruptions in the supply chain. Therefore, digitalising manual workflows can be a powerful tool to drive business growth and success.

An automated restock system can guide businesses to greater heights by enabling frequent resupply at lower costs compared with the high minimum-volume requirements set by conventional transporters.

By leveraging these technologies, companies can streamline their restocking processes, improve inventory accuracy and, ultimately, boost their bottom line. In addition, real-time inventory and delivery tracking eliminates the hassle of inefficient stock management, freeing businesses from irregular schedules and the limited coverage of traditional transporters.

This modern approach helps businesses swiftly adapt to the market and focus on their core competencies, facilitating the companies’ growth and expansion.

An automated inventory and digitalised restocking system is an effective solution for businesses across a wide array of sectors. By leveraging technology and data-driven strategies, businesses can revolutionise their operations, improve customer satisfaction and drive growth. It is time for businesses to embrace the future of inventory management.

Clarence Fernandez is head of B2B at Ninja Van Malaysia, a tech-enabled logistics company

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