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5 Advanced Inventory Solutions To Reduce Waste And Enhance Quality

Posted: August 01, 2019 by Ly Phan

5 Advanced Inventory Solutions To Reduce Waste And Enhance Quality

In the era of globalization, businesses are under pressure due to increasing customer demand and harsh competition. To gain a competitive edge without having to sacrifice quality, especially as customers are becoming harder to please than ever, it is crucial for companies to manage their warehouse inventory effectively with quality control and waste reduction initiatives. However, putting theory into practice can be quite a challenge. This blog will discuss how quality control and waste reduction can be affected by inventory management practices and explore five advanced inventory solutions to improve your business process.

Inventory management enhances product quality and cut down waste cost

Quality Control

Quality control in its most basic form is the implementation of predetermined procedures that assess specific product characteristics based on a set of criteria. Thus, by ensuring that the quality of inventory meets the expectations throughout all stages of the product life cycle, businesses can gain a tremendous competitive edge and cut down the total cost by more than 30%.    

It is critical for businesses to improve not only on the product itself but the full fulfillment process from making, packing and shipping to customers. With automated inventory control solutions, a business can keep track of the items’ processes and determine the time taken for each step to eliminate any misstep or waste. Therefore, minimizing any factors that can reduce the quality of the product while speeding up the whole process. 


Reduce waste

Inventory waste happens when businesses hold far more materials than required to meet customers’ demand. It is often caused by overproduction, forecasting errors, long lead time and transportation. 

In the lean inventory control model, businesses focus on manufacturing only sufficient inventory to meet short-term goals while adjusting operation processes to maximize their potential and eliminate any excess values. Therefore, companies can cut costs without having to compromise quality, hence, improve long term sustainability in an era of fierce competition.    

It is clear that inventory control can make or break a business. To achieve the optimal quality-controlled inventory level and to cut wastes, companies will have to implement different smart inventory solutions.


Top 5 inventory management practices to boost product quality and saving cost 

Implement warehouse handheld RFID technologies 

Handheld technologies such as RFID scanners are powerful tools for inventory management

RFID stands for “radio-frequency identification”, a technology that allows digital data encoded in RFID tags or smart labels and can be captured through radio waves. As the technology allows to scan and read tag outside the line-of-sight, it provides a higher degree of flexibility compared to barcode asset tracking software which requires the tag to be aligned with an optical scanner. 

Handheld RFID technologies have always been a part of the warehouse operation but they only gain the spotlight in recent years due to technology advancement and the rising demand for real-time tracking with smart inventory solutions. Instead of manual physical counts and paperwork, businesses are using handheld devices equipped with RFID technology and GPS to speed up the inventory control process. In fact, companies have observed a significant increase in inventory accuracy rate after implementing handheld RFID technologies.


Implement A Robust Warehouse Management Systems Software

Having to manually record and manage inventory often results in incomplete data and inaccurate information. This can be disastrous as business operations. To survive in the ever-growing market demand, many businesses are turning to automated inventory solutions.

A warehouse management software helps eliminate the burden of labor-intensive procedures by automating the recording and tracking of data in real-time. This is one of the most important functions and benefits of a warehouse management system as it enhances inventory accuracy. 

When being used in conjunction with warehouse handheld mobile devices, shipment transactions can be easily received and picked up to fulfill the distribution process with high accuracy and efficiency In order words, WMS allows businesses to streamline inventory process and obtain significant cost reduction. 


First-In First-Out Strategy (FIFO)

FIFO is an effective inventory control strategy with great benefits

The FIFO inventory strategy is based on getting the oldest stock sold first instead of the newest stock to minimize the effect of depreciation. As older items are more likely to be worn out, FIFO allows businesses to cut waste while still maintaining the highest quality level of their inventory. According to Sealed Air,  58% of US customers stated that damaged product, even just the package, will put a negative effect on their perspective toward the brand. 

However, to implement a FIFO system, companies need to adjust their warehouse operation area to easily access the older goods during the shipping and put-away process. A common but effective strategy is to locate them at the front area while newer ones will be moved to the back. In addition, implementing an appropriate stack pallet system with the older pallets on top instead of underneath or behind newer pallets is another great method to simplify the fulfillment process. 

Businesses also need to label the product with date and time to easily determine which product should go first. As mentioned above, businesses can track item information in real-time with the help of WMS and handheld mobile devices, allowing them to effectively implement FIFO strategy.


Setting priorities with the ABC model

Holding excess stock can be a heavy burden on the business operation as it increases the total cost. Hence, accurately forecasting the demand level and determining which products should be prioritized to avoid overproduction is crucial for any successful business.

Many businesses use the ABC model to divide products into different categories to prioritize specific inventories. It is an effective tool for inventory control by determining the impact of each item.

There are various ways to practice the ABC model but they all follow the same principle for categorization. Category A holds the least amount of inventory but accounts for the highest sales revenue. Category B holds a higher amount of inventory but lesser in value. Category C is the lowest-valued products that account for the majority of business inventory.     


For example: 

Category A: 10% the amount of inventory, making up 50% of annual revenue

Category B: 30% the amount of inventory, making up 35% of annual revenue

Category C: 60% the amount of inventory, making up 15% of annual revenue


The ABC method is used for stock checking and cycle counting in inventory management to reduce carrying costs. As products belong to category C are slow-moving, it should not be restocked at the same frequency rate as A or B. On the other hand, businesses should prioritize stocking products in category A with optimal safety stock level to avoid stock-out as they hold the highest sales revenue.  


Avoid Excessive Product Packaging 

Over-processing of product packing can lead to inventory waste as it does not provide any extra benefits for the business but increases the cost significantly. To minimize packaging waste, businesses need to take an active approach in reviewing operation performance and product packing to eliminate any unnecessary steps.  

Moreover, avoiding excessive product packaging does not only stop at cutting raw material use. By achieving an optimal level of product size, lowering the number of layers and product mass, businesses can reduce a tremendous amount of inventory waste. Amazon claimed that its optimizing packaging program has cut down more than 181,000 tons of packaging waste in the span of 10 years



Facing fierce competition and high customer demand, many businesses are trying to optimize their inventory management in order to cut waste without lowering quality. The 5 advanced inventory solutions above will allow businesses to gain competitive advantages and achieve the maximum potential profit while keeping the customer happy.

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