Unlocking the Secrets of Amazon’s Inventory Management: Tips and Strategies for Success

Amazon has transformed consumer expectations for the supply chain. Dubbed the “Amazon Effect,” the e-commerce giant has forced businesses to accelerate inventory operations to keep pace with new evolutions, like two-day delivery, recurring subscription ordering, and real-time tracking.

While most inventory-handling companies aren’t in direct competition with Amazon, there are critical lessons to be learned from Amazon’s inventory management practices and their continuous drive for innovation.

What is the hidden secret to Amazon’s success?

Amazon is the leader in online retail. Companies Market Cap reports that Amazon generated $502.19 billion in 2022 alone, outpacing growth in every year prior.

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 robotics. While Amazon is pushing boundaries in these areas, replicating its success doesn’t require expensive sci-fi concepts.

Instead, look to the foundational technologies that streamline inventory control on a daily basis.

Amazon Inventory Optimization with Barcode Scanning

Barcode scanning plays a crucial role in Amazon’s inventory management system. Wireless barcode scanners allow Amazon to quickly and accurately track the movement of products in and out of their warehouses, and it helps the company maintain accurate inventory levels.

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

By quickly locating and tracking inventory with barcode software, Amazon can improve the speed and accuracy of their warehouse management. In turn, this helps increase customer satisfaction and reduce costs.

Barcode scanning is also used for:

• Receiving products in the warehouse
• Recording location, statuses, and inventory levels
• Checking product availability and the amount of stock needed for replenishment
• Tracking movements inside the warehouse
• Picking and packing to assure order accuracy

By using barcode scanning technology, Amazon can focus on other areas of their business such as marketing and customer service, while still ensuring efficient stock management.

Strategic Shipping Practices & Data Collection

Automating traditional warehouse tasks increases agility through the supply chain as well. Amazon’s fully digital warehouse, distribution, and fulfillment network moves goods between locations with incredible efficiency. Even so, the e-commerce titan 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.

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 mobile data collection. Real-time integration with the central and multi-tier backend system, like an ERP or WMS software, ensures accurate information across geographically distributed locations.

Mobile barcoding, for instance, can record inventory transactions onsite or offsite, then transmit that information back to a central ERP.

Resiliency with a Digital-First Strategy

Like Amazon, businesses must continue to leverage digital automation technologies to keep pace with shifting demand and uncertainty.

One crucial reason for Amazon’s continuing success during the pandemic era is its heavy emphasis on a “digital-first” supply chain strategy. High-quality, real-time inventory tracking enables the massive enterprise to act on accurate data trends across the globe during a time when supply and demand may fluctuate dramatically. Agility depends on perfect data collection, in turn made possible with barcoding.

Mobile barcoding solutions remain a proven, cost-effective means of increasing predictability and resiliency. Like Amazon, wireless barcode devices help set the foundation for digital success in a fast-moving operation.

Be Like Amazon: Transform Inventory Control

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. Having a strategic partner you can turn to for honest, constructive advice in this area is indispensable.

Whether you’re struggling to solve a complex problem unique to your organization, or simply need reliable barcode automation, RFgen inventory experts can help.

In the meantime, explore some of these additional inventory management tips and strategies below:

• The Phantom of the Warehouse: Inventory That Isn’t There
• Where to Bury Your Dead Inventory
• Tips for Balancing Consumer Demand, Inventory Management and Company Costs
• Keeping Inventory Cool: Challenges of Temperature Control
• Sell It Before It Goes Bad: The Perils of Perishable Products