What is inventory visibility?
Inventory visibility is the ability to track and monitor the real-time location, quantity, status, and movement of your products or goods within a supply chain or inventory management system. It’s crucial for organizations to efficiently manage their supply chains, optimize inventory levels, reduce the risk of stockouts or overstock situations, improve order fulfillment processes, oversee partner-related reselling, and enhance overall operational efficiency.
Key components and aspects of inventory visibility systems typically include:
- Real-time tracking: Continuous monitoring of inventory items as they move through various stages of the supply chain, from production and storage to distributors and resellers
- Stock levels: Accurate and up-to-date information about the quantity of each product in stock, helping businesses avoid running out of critical items, having product in the wrong locations, or holding excessive inventory
- Location tracking: The ability to pinpoint the physical location of inventory items within warehouses, distribution centers, retail stores, or during transportation
- Order status: Visibility into the status of customer and partner orders, including order processing, picking, packing, and shipping
- Demand forecasting: Leveraging historical and real-time inventory data to make informed predictions about future demand and inventory needs
- Inventory turnover: Monitoring how quickly products are sold and replaced, helping to identify slow-moving items or excess inventory
- Supplier visibility: Extending visibility beyond internal inventory to include the inventory levels and lead times of suppliers, ensuring a smoother supply chain flow
Inventory visibility is especially critical in industries with perishable goods, high-demand fluctuations, global reseller/distributor networks, or complex supply chains. When done well, it can help you make more informed decisions, respond quickly to changes in demand or supply, minimize carrying costs, and enhance customer satisfaction by delivering your products when and where they are needed.