How to Optimize Supply Chain Security: 5 Comprehensive Inventory Management Strategies

Inventory management and security have become necessary for organizations aiming to enhance efficiency and safeguard their assets.

Integrating these critical components minimizes risks and optimizes inventory control, improving business performance. Security and inventory management can provide actionable insights and higher profitability for business leaders and their companies with the correct policies and tools.

The need for security in inventory management

Inventory management, an integral component of the supply chain, involves tracking products or goods from manufacturers to warehouses to the point of sale. This management type ensures the products arrive at the right place and time. Visibility is key to a successful inventory and supply management system as it gives businesses an accurate view of the products to fulfill customer orders, reduce shipment times, and prevent oversells, markdowns, and stockouts. 

Unfortunately, with all its moving parts in the supply chain, inventory management is often subject to many risks, including:

• Internal theft.
• External theft.
• Cybersecurity threats.
• Supply chain vulnerabilities.
• Natural disasters.
• Workplace safety issues.

READ: How to Minimize Cybersecurity Risks and Balance Customer Friction for Your Online Business

Many products ship from warehouses at some point in the supply chain, and cargo in the warehouse is subject to theft, especially when a business has partnered with a third-party logistics (3PL) company. According to CargoNet, around $31.1 million in cargo was stolen in the third quarter of 2023, and the numbers continue to increase yearly. The loss of products and income, unhappy customers and damage to brand reputation show the need for robust security within inventory management. 

How to merge inventory management and security

Combining inventory management and security involves time and planning, but the results are well worth the effort. Here are some effective ways to connect these two elements to protect products and cargo:

Enhanced external and internal security measures

Enhancing external and internal security is a priority for any business, and integrating security and inventory management can significantly improve safety measures. Warehouses have multiple doors and exits, and it is too easy for employees or non-warehouse personnel to steal products in a busy, fast-moving environment.

Business managers can improve warehouse security through alarm systems, warehouse security cameras and lighting. Better access control systems, security cages and enhanced inventory tracking can limit company losses. In particular, entryway security doors and garage doors are more secure when reinforced by motion sensors and locking entry points. Window security increases with the use of reinforced glass and security window film.

Improved inventory monitoring and accuracy

Security systems allow real-time monitoring of a company’s inventory. Businesses can ensure they have enough products in stock to meet consumer demand while keeping track of product numbers and shipments. Inventory management software gives real-time cargo levels and alerts for sudden stock level changes. Business management software like Bold Group’s Managely platform provides real-time analysis and interactive data visualizations, as well as configurable dashboards for better management and security of work orders, proposals, credits and invoices.

Inventory monitoring, combined with the security of radio-frequency identification (RFID) technology, is another critical tool for ensuring the accuracy of stock levels in warehouses. Using RFID tags or barcodes on products allows companies to track and monitor inventory product levels, expirations and movements. Better traceability and accountability mean more effective inventory management.

Streamlined access control

Access control is vital in maintaining security in physical and digital spaces and data. When inventory management is combined with access control systems, only authorized individuals can access sensitive company information and inventory levels. The result is a stronger physical and cybersecurity program that helps prevent threats and data breaches, enhancing the security of the business. 

A role-based access control system effectively manages user permissions so that employees can only access information relevant to their specific roles.

READ: 3 Ways to Maintain Your Business Data Integrity in 2024

Minimize shrinkage and losses

Inventory shrinkage in warehouses is often caused by operational errors, theft or damage, significantly impacting a company’s bottom line. Accurately labeling products, providing employee training and automating supply chain management are ways to prevent shrinkage. Additionally, using security measures with inventory management limits shrinkage by monitoring employee actions, deterring theft and identifying areas of vulnerability. 

Smart analytics and video surveillance can report unusual behaviors or patterns so that businesses can address inventory issues before they escalate. Another increasingly popular security option is locker-based systems that let production managers track and control high-value cargo. This vending solution requires employees to input a four-digit PIN or clocking card that keeps a real-time log of what product or item was taken and when.

Effectively secure business products and cargo

Combining inventory management and security systems is a winning concept for businesses that want to optimize how they handle inventory. In addition to protecting physical and digital assets, integrating these two tools elevates overall business performance. With the increasing numbers of inventory and cargo losses, companies can shape the future of business by incorporating inventory management and security into their warehouse practices. 

Indiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle, you can connect with her on LinkedIn.