4 ways automation is revolutionizing inventory management

Recent developments in automated technologies are rapidly transforming many essential business operations, providing human teams with data-driven support to simplify their workflows and improve productivity. Common use cases include manufacturing processes, internal communications and HR tasks, though increasingly businesses are extending the use of automation to security and logistics. 

Research published by the McKinsey Institute suggests that at least 50% of commercial processes can be automated using modern technology, though it’s estimated that only 18% of small businesses choose to operate inventory management software, even though these systems can help teams to avoid stock-outs, navigate supply chain issues and detect, address and prevent retail theft incidents. 

To help businesses better understand the potential benefits associated with intelligent stock control and logistics technologies, here are 4 ways automation is revolutionizing inventory management.  

1. Reliable stock counts 

When businesses choose to automate their inventory management systems, logistics teams are presented with accurate real-time data regarding the amount of stock currently being stored on-site. Manual inventory management will typically only provide an estimate of this information based on a comparison between previous stock counts and relevant sales data recorded between reorders. 

Automated inventory management systems, however, are designed to frequently update connected stock count databases to account for both newly delivered inventory items and all stock sold between reorders by comparing live back of house inventory levels to real-time data logged by POS software. 

With accurate real-time stock counts performed regularly and automatically, businesses no longer need to rely on time-consuming and often inefficient physical procedures to ensure their warehouses are adequately filled, allowing teams to focus their efforts on more complicated aspects of their roles. 

2. Regulated reordering 

As automated inventory management systems are capable of monitoring stock levels on a permanent basis, teams are able to program unique thresholds within the software used to determine when stock levels are close to depletion, with this threshold used to trigger a range of predetermined responses. 

Management teams can be notified remotely of low stock counts to ensure all customer-facing staff members are aware of live inventory levels, allowing teams to better manage client expectations, with further benefits found in the ability to automatically reorder inventory items before stock is depleted. 

Automated inventory management systems can be programmed to instantly place a new order with selected vendors as soon as stock levels reach a predetermined threshold, with management teams notified remotely and able to adjust such orders in relation to real-time market and supply chain data. 

3. Retail theft prevention 

Choosing to implement an automated inventory management system can also help businesses to detect and prevent instances of retail theft via integrations with wider business security systems. As all incoming and stored stock will be logged and monitored within the system using unique barcode scans or RFID tags, intelligent systems can be developed to immediately alert teams of suspected discrepancies. 

If the software notices any differences between real-time stock counts, POS sales data and recent order information, security staff can be notified remotely and advised to check relevant video security cameras and access control devices to further investigate the cause of potentially criminal incidents. 

In addition, inventory management software can be integrated alongside retail access control systems and fixed IP cameras to develop automated responses to attempted stock theft. Tags and labels placed on products for the purpose of live inventory monitoring can be used to trigger on-site alarms and locks if unprocessed items pass through access readers, allowing security teams to improve their incident response times. 

4. Reduce carrying costs 

Carrying costs related to excess inventory stored within the average business’ warehouses typically account for around 20-30% of the organization’s total inventory value. For teams operating manual inventory management procedures, this added expense is often necessary to ensure that stock-outs related to inventory discrepancies are avoided, but automated systems can help to resolve this issue. 

By configuring an automated inventory management system to only purchase products in relation to active client orders and site-specific healthy stock thresholds, management teams can reduce costs associated with excess inventory and ensure that all on-site stock levels remain optimal at all times.  

Essentially, automating this process ensures that businesses only ever carry enough stock to meet customer demand to dramatically lower the amount of valuable capital tied up in excess inventory, potentially providing smaller businesses with a much-needed financial buffer to assist with scaling. 


Choosing to develop and implement an automated inventory management system can help small and large-scale businesses to streamline their operations and reduce general operating costs. Using real-time data, teams can ensure that all active orders and stored products remain reliably monitored and factored into wider calculations, providing in-person staff with more time to focus on complex issues. 

Automated inventory management software can be integrated alongside business security systems to help identify and investigate retail theft incidents and improve loss prevention policies, as well as aid management teams in reducing expenses associated with carrying costs and overstocking, leading to a much more efficient, reliable and proactive approach to commercial inventory management

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