Advanced software solutions that incorporate artificial intelligence, digital twins, and more are helping companies get a better handle on inventory management.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
The supply chain chaos of the past few years has shone a light on inventory and the need for shippers and third-party logistics service providers (3PLs) to get it just right in order to best manage their supply chains and maintain high service levels. Technology continues to be a key tool in addressing the challenge, and two recent projects illustrate ways in which organizations are using advanced software and hardware solutions to increase accuracy and optimize inventory levels. Here’s how.
AI TO THE RESCUE
Third-party logistics service company Barrett Distribution Centers was looking for a way to improve inventory monitoring across its warehouse network. The company operates more than 25 facilities nationwide, serving clients across a range of industries—including apparel and footwear, health and beauty, consumer packaged goods, and consumer electronics. Associates had been using forklifts and scanners to manually track and manage inventory, a process that was becoming increasingly difficult due to the 3PL’s growing e-commerce volumes, which require close inventory tracking to fill individual shipments. Managers wanted to augment the manual process with a technology-based solution that could reduce the company’s reliance on both equipment and labor.
The answer came from Pittsburgh-based warehouse automation company Gather AI, which combines artificial intelligence (AI), machine learning (ML), and analytics to create a drone-powered inventory monitoring system that is helping users improve inventory accuracy, boost productivity, and improve the bottom line. To launch the project, the tech firm digitally mapped Barrett’s warehouses so that the drones could fly autonomously and so that Barrett could use them to conduct regular inventory monitoring, a process that would cut back on the number of forklifts and warehouse associates required for cycle counting.
Under the new process, the drones photograph pallet locations in the warehouse, and Gather AI’s ML algorithms then decipher the bar codes and text from the images, comparing what’s read with what’s logged in Barrett’s warehouse management system (WMS). Warehouse managers can view results from a web dashboard.
Gather AI says the process is 15 times faster than manual cycle counting and provides real-time access to inventory data—which allows warehouse managers to more easily identify and address inventory exceptions.
Barrett is using the drone solution at six of its warehouses and is seeing strong results, according to Jim Rapoza, vice president of business process optimization. Since implementing the project in 2022, at one location alone Barrett has reallocated six cycle counters to more value-added tasks and has eliminated $250,000 in material handling equipment. On top of that, inventory accuracy has improved by up to 70%, according to both Barrett Distribution and Gather AI.
SLOTTING FOR OPTIMIZATION
Medical device manufacturer Boston Scientific needed a better way to manage the growing number of stock-keeping units (SKUs) at its nearly 600,000-square-foot distribution center (DC) in Quincy, Massachusetts. Upwards of 10,000 SKUs are housed in a variety of racking systems at the DC, including bulk floor pallet locations for the fastest-moving items, case flow racks, and wire deck shelves. DC associates primarily perform individual picks—also called “each picks”—to fulfill orders, which can require considerable travel throughout the facility. Company leaders wanted to create a more flexible inventory slotting solution that would address those issues and lead to more effective, efficient overall operations.
Boston Scientific turned to logistics automation and software company Fortna and its OptiSlot DC software to tackle the problem. But they had to put some initial slotting strategies into place first. A “slot” is a shelf or portion of a shelf where items sit in the warehouse. Slotting is the process of determining the best slot for all of the items a warehouse ships. For example, fast-moving items may be placed in easier-to-access locations—perhaps closer to the loading dock for faster loading.
Leaders at Boston Scientific began by splitting the DC into four areas and optimizing inventory zone by zone. Next, products were grouped and slotted for easier picking, putaway, and replenishment. They also looked for opportunities to improve overall picking productivity by:
Optimizing pick paths to reduce travel throughout the DC;
Reducing the need for workers to bend and reach by implementing “golden zone slotting,” a technique in which high-velocity items are assigned to locations at chest height, making it easier for associates to pick quickly while also supporting more ergonomic picking;
Improving space utilization and reducing the number of overall replenishments by improving the slotted capacity in active forward pick and minimizing the overstock in reserve.
The next step was applying Fortna’s slotting optimization software, which allowed project leaders to factor in goals, rules, and constraints to meet objectives; weigh the importance of each objective; and compare potential scenarios. OptiSlot does this by the use of digital-twin technology, which allows managers to replicate their warehouse layouts and view or test potential results before dedicating the labor to implement a particular solution.
Ultimately, Boston Scientific selected an optimization scenario that grouped certain specialty items together; implemented golden-zone slotting to boost productivity and improve ergonomics; and moved its fastest “cube-moving” items to larger, prime locations that would reduce travel and replenishment. Cube movement refers to high-volume items that take up more space in the warehouse, according to Fortna’s vice president of software, Will King. Moving such items from a smaller space to a larger one—from a hand-stack area to a pallet location, for example—reduces the need to replenish those areas frequently, cutting back on work and raising productivity.
Applying the process to a portion of the warehouse in 2022 yielded immediate results, including:
A reduction of 135 replenishments per week, or about 12% of the total;
Improved space utilization, with an overall storage capacity increase of 1.6%;
A reduction in travel distances that amounted to nearly 1 million fewer feet traveled within the DC per week.
Project manager Dan Hamilton, of Boston Scientific, touted the results in a statement describing the project earlier this year.
“Prior to [implementing] OptiSlot, our slotting tool was a very cumbersome, manual Excel-based tool—so we were limited with what we could achieve,” he said. “With OptiSlot, we’re now able to seamlessly layer in as much data (including custom data) from as many different sources as we want, and the flexibility and adjustability of the tool allows us to analyze as many different rules, goals, constraints, and ‘what if’ scenarios as we want. Slotting-move plans—spanning up to thousands of moves—and comparative reports come back in a matter of minutes, with planned out multi-chain move sets ready to go. We’ve only just begun to scratch the surface of the capabilities of this tool, and we are already reaping considerable operational benefits.”
More companies are likely to follow suit as inventory remains a key issue across the logistics landscape. This past spring, the Logistics Managers Index—which tracks industry performance across a range of measures—showed contraction in inventory levels for the first time in more than six years and predicted lower levels over the next 12 months—signs that companies are working through the glut of inventory that plagued the industry in early 2022 and are trying to get a better handle on it in the years ahead.
Autonomous forklift maker Cyngn is deploying its DriveMod Tugger model at COATS Company, the largest full-line wheel service equipment manufacturer in North America, the companies said today.
By delivering the self-driving tuggers to COATS’ 150,000+ square foot manufacturing facility in La Vergne, Tennessee, Cyngn said it would enable COATS to enhance efficiency by automating the delivery of wheel service components from its production lines.
“Cyngn’s self-driving tugger was the perfect solution to support our strategy of advancing automation and incorporating scalable technology seamlessly into our operations,” Steve Bergmeyer, Continuous Improvement and Quality Manager at COATS, said in a release. “With its high load capacity, we can concentrate on increasing our ability to manage heavier components and bulk orders, driving greater efficiency, reducing costs, and accelerating delivery timelines.”
Terms of the deal were not disclosed, but it follows another deployment of DriveMod Tuggers with electric automaker Rivian earlier this year.
Manufacturing and logistics workers are raising a red flag over workplace quality issues according to industry research released this week.
A comparative study of more than 4,000 workers from the United States, the United Kingdom, and Australia found that manufacturing and logistics workers say they have seen colleagues reduce the quality of their work and not follow processes in the workplace over the past year, with rates exceeding the overall average by 11% and 8%, respectively.
The study—the Resilience Nation report—was commissioned by UK-based regulatory and compliance software company Ideagen, and it polled workers in industries such as energy, aviation, healthcare, and financial services. The results “explore the major threats and macroeconomic factors affecting people today, providing perspectives on resilience across global landscapes,” according to the authors.
According to the study, 41% of manufacturing and logistics workers said they’d witnessed their peers hiding mistakes, and 45% said they’ve observed coworkers cutting corners due to apathy—9% above the average. The results also showed that workers are seeing colleagues take safety risks: More than a third of respondents said they’ve seen people putting themselves in physical danger at work.
The authors said growing pressure inside and outside of the workplace are to blame for the lack of diligence and resiliency on the job. Internally, workers say they are under pressure to deliver more despite reduced capacity. Among the external pressures, respondents cited the rising cost of living as the biggest problem (39%), closely followed by inflation rates, supply chain challenges, and energy prices.
“People are being asked to deliver more at work when their resilience is being challenged by economic and political headwinds,” Ideagen’s CEO Ben Dorks said in a statement announcing the findings. “Ultimately, this is having a determinantal impact on business productivity, workplace health and safety, and the quality of work produced, as well as further reducing the resilience of the nation at large.”
Respondents said they believe technology will eventually alleviate some of the stress occurring in manufacturing and logistics, however.
“People are optimistic that emerging tech and AI will ultimately lighten the load, but they’re not yet feeling the benefits,” Dorks added. “It’s a gap that now, more than ever, business leaders must look to close and support their workforce to ensure their staff remain safe and compliance needs are met across the business.”
The “2024 Year in Review” report lists the various transportation delays, freight volume restrictions, and infrastructure repair costs of a long string of events. Those disruptions include labor strikes at Canadian ports and postal sites, the U.S. East and Gulf coast port strike; hurricanes Helene, Francine, and Milton; the Francis Scott key Bridge collapse in Baltimore Harbor; the CrowdStrike cyber attack; and Red Sea missile attacks on passing cargo ships.
“While 2024 was characterized by frequent and overlapping disruptions that exposed many supply chain vulnerabilities, it was also a year of resilience,” the Project44 report said. “From labor strikes and natural disasters to geopolitical tensions, each event served as a critical learning opportunity, underscoring the necessity for robust contingency planning, effective labor relations, and durable infrastructure. As supply chains continue to evolve, the lessons learned this past year highlight the increased importance of proactive measures and collaborative efforts. These strategies are essential to fostering stability and adaptability in a world where unpredictability is becoming the norm.”
In addition to tallying the supply chain impact of those events, the report also made four broad predictions for trends in 2025 that may affect logistics operations. In Project44’s analysis, they include:
More technology and automation will be introduced into supply chains, particularly ports. This will help make operations more efficient but also increase the risk of cybersecurity attacks and service interruptions due to glitches and bugs. This could also add tensions among the labor pool and unions, who do not want jobs to be replaced with automation.
The new administration in the United States introduces a lot of uncertainty, with talks of major tariffs for numerous countries as well as talks of US freight getting preferential treatment through the Panama Canal. If these things do come to fruition, expect to see shifts in global trade patterns and sourcing.
Natural disasters will continue to become more frequent and more severe, as exhibited by the wildfires in Los Angeles and the winter storms throughout the southern states in the U.S. As a result, expect companies to invest more heavily in sustainability to mitigate climate change.
The peace treaty announced on Wednesday between Isael and Hamas in the Middle East could support increased freight volumes returning to the Suez Canal as political crisis in the area are resolved.
The French transportation visibility provider Shippeo today said it has raised $30 million in financial backing, saying the money will support its accelerated expansion across North America and APAC, while driving enhancements to its “Real-Time Transportation Visibility Platform” product.
The funding round was led by Woven Capital, Toyota’s growth fund, with participation from existing investors: Battery Ventures, Partech, NGP Capital, Bpifrance Digital Venture, LFX Venture Partners, Shift4Good and Yamaha Motor Ventures. With this round, Shippeo’s total funding exceeds $140 million.
Shippeo says it offers real-time shipment tracking across all transport modes, helping companies create sustainable, resilient supply chains. Its platform enables users to reduce logistics-related carbon emissions by making informed trade-offs between modes and carriers based on carbon footprint data.
"Global supply chains are facing unprecedented complexity, and real-time transport visibility is essential for building resilience” Prashant Bothra, Principal at Woven Capital, who is joining the Shippeo board, said in a release. “Shippeo’s platform empowers businesses to proactively address disruptions by transforming fragmented operations into streamlined, data-driven processes across all transport modes, offering precise tracking and predictive ETAs at scale—capabilities that would be resource-intensive to develop in-house. We are excited to support Shippeo’s journey to accelerate digitization while enhancing cost efficiency, planning accuracy, and customer experience across the supply chain.”
Donald Trump has been clear that he plans to hit the ground running after his inauguration on January 20, launching ambitious plans that could have significant repercussions for global supply chains.
As Mark Baxa, CSCMP president and CEO, says in the executive forward to the white paper, the incoming Trump Administration and a majority Republican congress are “poised to reshape trade policies, regulatory frameworks, and the very fabric of how we approach global commerce.”
The paper is written by import/export expert Thomas Cook, managing director for Blue Tiger International, a U.S.-based supply chain management consulting company that focuses on international trade. Cook is the former CEO of American River International in New York and Apex Global Logistics Supply Chain Operation in Los Angeles and has written 19 books on global trade.
In the paper, Cook, of course, takes a close look at tariff implications and new trade deals, emphasizing that Trump will seek revisions that will favor U.S. businesses and encourage manufacturing to return to the U.S. The paper, however, also looks beyond global trade to addresses topics such as Trump’s tougher stance on immigration and the possibility of mass deportations, greater support of Israel in the Middle East, proposals for increased energy production and mining, and intent to end the war in the Ukraine.
In general, Cook believes that many of the administration’s new policies will be beneficial to the overall economy. He does warn, however, that some policies will be disruptive and add risk and cost to global supply chains.
In light of those risks and possible disruptions, Cook’s paper offers 14 recommendations. Some of which include:
Create a team responsible for studying the changes Trump will introduce when he takes office;
Attend trade shows and make connections with vendors, suppliers, and service providers who can help you navigate those changes;
Consider becoming C-TPAT (Customs-Trade Partnership Against Terrorism) certified to help mitigate potential import/export issues;
Adopt a risk management mindset and shift from focusing on lowest cost to best value for your spend;
Increase collaboration with internal and external partners;
Expect warehousing costs to rise in the short term as companies look to bring in foreign-made goods ahead of tariffs;
Expect greater scrutiny from U.S. Customs and Border Patrol of origin statements for imports in recognition of attempts by some Chinese manufacturers to evade U.S. import policies;
Reduce dependency on China for sourcing; and
Consider manufacturing and/or sourcing in the United States.
Cook advises readers to expect a loosening up of regulations and a reduction in government under Trump. He warns that while some world leaders will look to work with Trump, others will take more of a defiant stance. As a result, companies should expect to see retaliatory tariffs and duties on exports.
Cook concludes by offering advice to the incoming administration, including being sensitive to the effect retaliatory tariffs can have on American exports, working on federal debt reduction, and considering promoting free trade zones. He also proposes an ambitious water works program through the Army Corps of Engineers.