Inventory management- An overlooked factor in retail
Inventory can be the biggest asset for business but if ignored and not managed properly can turn into a liability. Overstocks, Out of stocks and Preventable returns are the three major termites eating up on your inventory costs.
Inventory Management among other factors of retail business is often the most overlooked and under optimised factor. Inventory can be the biggest asset for business but if ignored and not managed properly can turn into a liability. Overstocks, Out of stocks and Preventable returns are the three major termites eating up on your inventory costs. Due to the combined impact of these factors, Retailers lose billions annually.
The question that needs to be answered is, Why is inventory management a challenge to retailers?
Let us look into some problems in a detailed manner:-
1. We are still using old-fashioned techniques to maintain data like spreadsheets and legacy systems. They are pervasive, time-consuming and are highly prone to human error. In a recent survey, it was reported, more than 60% people said, Human error from manual processes as the root cause of inventory fulfillment issues.
2. We have complicated the concept of “Omnichannel”. Companies operate several sales channels and distribution systems via outdated channels. It is tough for this systems to track and manage stock quantities through all the distribution channels leading to overstocks, overselling and out of stocks.
3. Presence of Siloed data disrupts transparency in a business and prevents giving unified experience to the customer. The more departments you have, The more channels you sale through, the more difficult it becomes to manage your customers and give them a better experience. This is what most companies are doing, Managing their e-commerce, wholesale and retail units as separate entities i.e. that’s not the way you give your customer an omnichannel experience.
The advent of modern technology and digital means of communication where websites and mobile apps have become the new windows for shopping, Retail businesses are on the mark. They are doing well in that regard but the fact is having a website or an app is just not enough if your back-end support systems are not efficient to manage the customers your website or app brings in. You may have the best website or app in the world but that’s just the front part of your business. The increased traffic on your website is of no use if your back-end operational systems like inventory management and supply chain management aren’t efficient enough to manage them. You get new customers every day but what is the use if you cannot fulfill their requirements.
Look beyond those inefficient operational systems, as you empowered the frontal aspect of your business, do the same for your back-end operations as well. Move away from siloed data, poor inventory management, lack of visibility and unnecessary costs.When you sync all your operations under one system, You get ready to give your customer an omnichannel experience.
The products you show on your website, you should have them somewhere in your network, so that you don’t disappoint your customer in a way that he turns away from you. Be true to your brand and be loyal to the promises you make. And to achieve this you need to empower your inventory management and consider technologies that provide transparency in order fulfillment and inventory tracking. You need to have an order fulfillment software that checks through all your order management sites and finds the best to satisfy an inventory order.