In today’s digital marketplace, retailers find themselves adrift in a vast ocean of inventory. Understocking products can have devastating consequences, particularly for those retailers looking to maximise return on investment. Meanwhile, the impact of overstocking can be just as dyer. To add to the problem, as customer expectations rise like waves, they threaten to sweep retailers overboard. It has therefore become vital that they sail into the eye of the storm and face the issue of inventory management head on.
Issues can arise throughout any point of the supply chain voyage, be it dealing with the fallout from a missing shipment or warehouse delays as a result of machine recalibrations. The results see retailers floundering in the treacherous waters. To ease the difficulties, they need to be prepared for the inevitable troubles ahead.
Riding the waves
Gone are the days when the retail supply chain was a simple process. From supplier to distribution centre, distribution centre to the store and store to the customer – it barely changed in 150 years. Yet, today – retailers face a stormy journey. As consumer expectations continue to change, and rapidly – the need to fulfil these increasing demands across multiple new channels is driving up inventory.
In fact, according to Gartner, 54 per cent of retailers say that fulfilling online orders from store increases store inventory by 10 per cent. Essentially, even the best run retailers could be having issues with increasing inventory as they expand across multiple channels.
However, what’s more, it’s quite likely that the inventory is covering up pre-existing issues, not just with the production system, but with the omni-channel fulfilment system in its entirety. These issues can include poor sales forecasts, problematic inventory placement decisions, supplier delivery delays, missing process orchestration, data silos and inefficient manual processes.
Preparing for the journey ahead
To avoid these bumps in the supply chain and to improve the process, retailers need to implement the right technology to facilitate necessary data flows. This applies to both inside and outside of the organisation.
The best place to start is in finding out what the source of these issues is. In doing this, retailers are given much more control over inventory levels.
When it comes to inventory and visibility, a great starting point is real-time inventory visibility. This offers retailers instant insight into stock levels. Think about it. It’s 11am and you’re expecting a bulk delivery, but you have no idea where it is or when it will arrive. A real-time inventory visibility solution can help every retailer to overcome this with real-time insights that can make it possible to meet the demands of customers and planners through any channel. By understanding the real-time inventory status across all of your locations, you can determine the most beneficial way to use the inventory at any specific time to maximise sales and profits. This, whilst also ensuring customer satisfaction. Increased visibility over the supply chain is crucial in maintaining an updated view of inventory, regardless of the number of systems that any retailer may have.
A pleasant voyage
We live in a more digital world than ever before. This means that consumers are far less patient when going into a store when it comes to finding a certain product that they are looking for. If a retail assistant were to walk over to a shelf to see if the product is still in stock, chances are the customer might not wait. Having the ability to check stock levels on the online systems is therefore key to providing a customer with accurate and up to date information regarding the location of an item – or alternatively, when the next shipment is due.
This doesn’t just apply to retailers. But, to the customer too. Today’s customers are no longer just going to traditional brick-and-mortar stores. They are shopping online via mobile devices, iPads and tablets. This means they expect to be able to check whether or not a certain product is available in store – or if in fact, it is stocked in a store nearby.
Whilst it is true that implementing real-time visibility into the inventory process may take time – it’s easy to understand. This is why it is important that retailers take their time to find the best solution for them.
The retail industry knows no bounds – with such fierce competition, how can retailers steam ahead? Customer satisfaction has been pushed to the forefront of everything that we do, and making the customer journey as smooth as possible is essential if retailers are to stay afloat. In order to ensure that their experience is as seamless as possible, stock management must be a priority. By having real-time insights into the status of desired products, retailers can successfully meet the increasingly high customer expectations and create brand ambassadors. Only then will they be prepared to ride the waves ahead.
Oliver Guy, Global Industry Director, Software AG
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