For shippers, that means they must look beyond the walls of warehouses and the often narrow paths of the basic supply chain.

In the past, shippers deployed inventory management tools such as warehouse and transportation management, enterprise and material resources planning systems, barcodes and radio frequency identification technologies that tracked items through production and distribution channels. Now, companies are looking for ways to integrate those inventory management tools into broader business enterprises such as demand forecasting and to then take that discipline further by adding risk management and other factors into the mix.

There is one very large tool to help them, of course. The Internet laid the foundation for what can now be called 21st century inventory management.

“It’s not as if a company can add a lot of people to their team to create data; it literally requires them to contact and connect with their service providers,” said Greg Johnsen, executive vice president of marketing and sales at GT Nexus. “That’s a big challenge. And it cannot be solved without access to technology.”

For shippers, the Internet has not always been a panacea. Security has seemed problematic and applications experienced endless conflicts, breakdowns and maintenance hassles. The bust years after the 2000 tech crash left the field littered with failed attempts by technology providers to create the cooperative, if not yet collaborative, relationships that would establish inventory and other kinds of visibility.

The development of service-oriented architecture, and software-as-a-service,

has put most of those doubts to rest. Technology vendors can now provide secure connections over the Internet to centralized computer servers storing continuously updated information about all kinds of business operations, inventory management being an increasingly popular one among them. Software applications accessible over Internet allow shippers “The issues are much more complex and difficult to solve. to aggregate and analyze data from Inventory management prowe”ss will allow multiple sources across the supply 3PLs to lock their customers into the service, chain. Technological links have largely while improving the service provider’s own supplanted the fragile and uncertain con- margin performance and attracting custom-nections forged between human laborers. ers who appreciate encompassing and per-Inside one global retailer’s system, Hill vasive inventory control. said, “It’s so automated, people could take Johnsen suggests the ability to manage a week’s vacation and the data would con- inventory across multidimensional supply tinue to flow.” chain needs is becoming a necessary discipline for logistics planners and their provid- Inventory management technologies ers. “Shippers have come to expect, and they are continuing to develop, and some of do expect from their service providers, that them with better results than others. they be communicative and electronically More than 30 years after they debuted able, because otherwise they really cannot commercially in supermarket checkout begin to integrate into their own operations lines, barcodes remain more popular and processes the information that only that than RFID. Cost, accuracy and reliability service provider holds,” he said. ■

issues still dog those wireless electronic tagging systems.

Lack of data exchange standards has prompted many technology providers to emphasize data-agnostic systems that translate automatic shipping notifications and other formats into XML or other more universal streams. Hill recounted the remark by an attendee at a recent technology conference that, “Standards are like toothbrushes — everyone knows they need one, but no one wants to use the other guy’s.”

The macroeconomic effects of higher fuel costs, fluctuating currency values and shifting consumer demand that are playing havoc with shippers’ sourcing and supply chain decisions also pose challenges to maturing inventory management technologies. Flexibility demanded by these trends runs smack into shippers’ needs for accurate and timely inventory data. “Data latency will be the death of organizations,” Hill said.

Perhaps most immediate and daunting is the dearth of capable third-party logistics providers who can act as a conduit between shippers and their suppliers, carriers and distributors. “Most 3PLs have yet to really develop a competency around inventory management,” Gaurav said.

That’s a missed opportunity, Gaurav said.