Solar Survival: How is Digitalisation Affecting Inventory Management

Globalization, rapidly changing market circumstances, quality concerns, supply chain security and operational risks are all posing new challenges for companies in the solar panel manufacturing sector. 

This difficult market climate puts pressure on solar panel installation companies to take steps to avoid supply chain disruptions and establish a sustainable supply chain for the future.

What is digital inventory management?

Digital inventory management refers to the ability to oversee real-time inventory activity. 

It involves the use of inventory tracking systems and other types of technology to enhance visibility by tracking data and collecting information as finished goods/products move through the supply chain.  

By integrating an inventory management software solar installation companies can track how much inventory is available, where items are located, what are their best selling products, and more. 

With the right digital inventory systems in place, data is automatically recorded, which allows you to oversee inventory control and make decisions and predictions on inventory allocation, restocking, and more.

How is Digitalisation Affecting Inventory Management?

Digitalisation is not about collecting and managing data, but rather about intelligently using the most relevant information, in order to

  • Evaluate stock-outs,

  • Identify fast-moving and non-moving stock,

  • Prioritize stocks and orders,

  • Properly define safety stocks,

  • Forecast future demand,

  • Start procurement and installation operations on time,

  • Make cost-optimized orders,

  • Introduce new items (or range of solar products) in a cost-efficient way,

  • Optimally aggregate purchase orders,

  • Take supplier conditions into account.

Traditional vs. Digital Inventory: What’s the difference?

Traditionally, inventory management involved making updates or changes to spreadsheets or paper every time more inventory was ordered, a sale was made, and items were shipped.

It should go without saying that the traditional process of manually tracking inventory is time-consuming and prone to human error. 

On the other hand, digital inventory best practices reduce human error, improve accuracy and productivity, and streamline data and information.

By integrating a digital inventory system along with a warehouse automation system it enables more accurate order accuracy, faster fulfillment, and the ability to track inventory across distribution centers.

The Inventory Challenges of Solar Companies

Due to the quick rate of innovation, having too much inventory in the solar sector is very risky. Major improvements in solar panel technology enhance its efficiency and energy storage capacity with each passing year.

There are two specific obstacles to effective inventory management in the solar industry:

1. Inventory Level Fluctuations

The demand for solar panels fluctuates considerably as a result of external influences. The market naturally drops and rises in response to changes in power demand - when utility rates rise, more people want to convert to solar.

State, federal, and international incentives, on the other hand, have the potential to change market demand. The customers want to switch when they can obtain the best government incentives, which might place a burden on your inventories if you don't plan ahead of time.

2.Market flow

The solar market is volatile, with an overall downward trend in prices. Solar products can face quick depreciation. If you have unsold inventory on hand, market conditions may force you to sell panels at a loss. This is less of an issue if you just acquire equipment for contracted work and sell it at an agreed-upon price. However, if you buy inventory before selling it to clients, market value drops might lose you money.

Successful Digitalization of Inventory Management - The Benefits of a Well-Run Inventory

Inventory management has the power to streamline everything from solar panel serial number checks to restocking. When you use software to improve your inventory management, you gain advantages such as:

Improved communication

Inventory management software makes it simple to know where your inventory is and who moved it there. When inconsistencies develop, you may always follow up with the appropriate personnel. Meanwhile, automatic notifications notify the appropriate staff of inventory concerns that require their attention. 

When client demand shifts and you need to restock new items, you'll be notified. If warehouse employees select the incorrect items for a shipment, their barcode scanners will alert them. Because these warnings are generated automatically, less information is lost owing to communication difficulties.

Centralized data

Inventory may arrive from various vendors and be stored in multiple warehouses. Meanwhile, the serial numbers of each solar panels and related products placed for clients must be tracked. 

When you monitor stock by hand, it's possible for data to get siloed due to all of the many sources and destinations for your inventory. 

Inventory management software maintains everything in one place, so everyone who needs it can get it. Billing, buying, accounting, warehouse management, and task scheduling will all be improved at the same time.

Multi-location support

As a solar company, you can have warehouses all over the country, each with a different quantity of goods. Many businesses must handle the complexities of stocking many locations. 

When a team comes for an installation or repair project, they require both the equipment specified for the task as well as a variety of tools to conduct on-the-spot repairs. You can do more projects on a single trip if you have inventory for a variety of installation or maintenance needs.

Barcode scanning and serial number tracking

Tracking serial numbers is crucial for large, costly equipment such as solar panels.

You'll frequently need to look up a product's repair history, which you may do by keeping track of serial numbers with each repair operation. In the event of a manufacturer recall, you may also need to maintain track of serial numbers.

Solar serial numbers for panels and other connected equipment may be easily checked using inventory management software with barcode integration. During installation and every service visit, a crew member may scan a barcode with their phone, allowing your organization to conveniently track serial numbers.

Reorder forecasting

The solar industry's demand can fluctuate substantially. Unpredictable electricity costs and shifting government incentives can drive up demand for solar panels at some periods of the year while driving it down at others. You need a smart system that can forecast when you'll require extra inventory when your sales velocity varies.

You don't want to reorder too many panels, anticipating a rise in demand when it really decreases. Simultaneously, as demand increases, you must reorder more frequently. Changes in supplier lead times, another prevalent worry in the solar business, must also be considered.

Inventory management software can predict precisely when you need to reorder based on your desired level of safety stock, current sales velocity, supplier lead times and other data.

Real Time Inventory Management with PowerOn

The benefit of savvy inventory control is that you not only avoid being stuck with depreciating assets to free up more cash, but that you also may be able to streamline your operations enough to cut back on expensive warehouse space. 

Add to that the benefits of being able to find what you need, when you need it, and it’s a clear win-win.

Managing your solar company's inventory can be a daunting task. But with PowerOn's inventory management software, it doesn't have to be. 

With PowerOn, you can manage inventory across all locations in real time, so you always know what's in stock and where it is. You can also track serial numbers and barcodes for solar panels and other equipment, making it easy to lookup repair history and manufacturer recalls. And with PowerOn's reorder forecasting, you can be sure you're always stocked up on the solar panels and equipment you need, without over-ordering. 

Contact us today or schedule a FREE DEMO to learn more about how PowerOn can help your solar company manage inventory better.

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Solar Survival: How is Digitalisation Affecting Inventory Management
Nikola R. 23 June, 2022
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