Most companies will now have data that can tell them how much of a part they have and where it is, but don’t use this data to locate stock in clever ways. Instead, it is still common to have a central stock holding and pay large sums for the space. However, just as processes have improved in other areas, technology can be used to improve the way you hold onto stock using the “virtual warehouse”.
The concept of a “virtual warehouse” may seem idealistic at first; parts can’t be stored virtually, they have to be held somewhere. However, the purpose of a virtual warehouse is to use data so that wherever your parts are, they can accessed and moved to the right place. For example, in a busy field service supply chain, there will always be a significant amount of stock out in the field. This might include good stock an engineer has just picked up and it might also include return stock that has just been taken off a customer site.
If you have data that tells you what stock you have in field and where it is, you can treat field stock as you would any item sitting in a central warehouse. You could, for example, raise an order for the return stock, so that as soon as it arrives back at a forward stock location, it is rerouted to another engineer for the next job. You could even intercept the stock while it is out in the field. Technology and tracking allows your stock to spend as little time at a central holding as possible.
This sort of data can also help greatly when you need to order large quantities of new stock. Sometimes there are specific projects that require specialist stock and you need to keep a holding of it while that project runs. Typically you will place a large order with a supplier and then ship it to a central stock holding where it will wait until it is needed. However, with a virtual warehouse system you can instead order the stock as and when you need it. Your supplier would ship the stock as normal, but it would automatically get sent to the engineer that needs it. This speeds up the process of getting stock out to the field and means you don’t need to order extra stock you won’t use.
In a 2017 survey of supply chain professionals, warehousing space was found to be the third largest cost driver in supply chains of those questioned, but until recently it has just been accepted that there is very little you can do to lower this cost. However, with virtual warehouse technology this doesn’t need to be the case. In ten years’ time we may look back and see the concept of a central stock holding as archaic, but with the virtual warehouse able to provide significant cost savings today, why not get ahead of the curve?
Data drives everything we do at ByBox and we offer market leading virtual warehouse software to help reduce supply chain costs for our customers. For more information. Please contact us.