A virtual warehouse is a potential method businesses can use to monitor their stock and inventory. Virtual stock monitoring offers tremendous detail, helping companies to fulfill their buyers’ orders quickly and with lower costs. Customer expectations are increasing, while the nature of their demands is changing rapidly. So the virtual warehouse is becoming an essential inventory tool for businesses of any size to stay competitive and increase customer satisfaction.
Pros of Virtual Stock Monitoring
Virtual warehouses overall increase flexibility and reduce costs through real-time monitoring of inventory information as well as product movements. The specific pros of virtual warehouses differ depending on each business’s situation, but they usually include lower inventory risk, faster customer order fulfillment, simplified omnichannel sales, and more.
Faster fulfillment: Virtual warehouses can help identity which physical center is closest to a shopper, allowing a business to shorten transportation times.
Greater diversity: Virtual warehouses can help collect information from the entire supply chain of a company, allowing it to increase the breadth of its offerings without leasing or purchasing more warehouse space.
Minimize “dead stock”: A virtual warehouse lets a company have real-time inventory control, helping to prevent dead stock ( by monitoring products’ expiration dates, for example). After being warned about an item’s imminent expiration, the business might consider promoting it to sell it as soon as possible before it expires.
Reduce inventory risk: A virtual warehouse can lower inventory risk by lowering the amount of physical stock and inventory a business must carry. Since most businesses have a limited amount of physical space, storing items that aren’t big sellers is impossible. The corporation may carry less inventory by using a virtual warehouse to readily see and fill requests from numerous locations instead of stocking all items in each warehouse.
Omnichannel Sales: A virtual warehouse can allow a company to simplify omnichannel selling. For instance, it gives a retailer the ability to sell products in places other than its own storefronts. An omnichannel system will create an easy shopping experience by integrating communication, distribution, and support service, allowing customers to access company products through various channels.
Challenges of Virtual Warehouses
Building and developing a virtual warehouse requires multiple related systems, such as inventory management, warehouse management, and ERP. Problems can arise if the warehouse isn’t integrated with inventory management systems — Each system operating independently may result in businesses storing more inventory on every route. Likewise, using various vendors creates the need to ensure all systems are integrated and sharing information in real-time, requiring a huge investment of resources and time.
In addition, some businesses dealt with inventory management issues because of establishing too many virtual warehouses. For instance, it is possible to set up virtual warehouses for different sales regions or channels. But many virtual warehouses acting on a single physical inventory information can cause conflicts. Managing conflicts requires careful business process rules or algorithms that automate avoidance.
Virtual stock monitoring through one or more virtual warehouses lets your company improve its production, fulfillment, and distribution procedures. Your company can serve customers through various sales channels and stores and access inventory from anywhere, leading to higher customer satisfaction and cheaper and quicker order fulfillment.