What most
business owners have always wanted to achieve is to have enough inventories to
satisfy the demand of the consumers. However, Tectono Business Review has noted that inventory tactics have changed due
to the fast pace of commerce, its global reach and heightened consumer
expectations driven by social shopping, online review sites and comparison
pricing on the Internet.
There is
little doubt that the speed of supply chain has steadily increased in recent
years, in terms of how fast goods move from production to consumption. These
forces are bombarding retailers and their suppliers but technology is coming to
their aid by helping them adapt to the new marketplace dynamics. To cope with
the challenges, Tectono
Business Review recommends strategies and restructuring that will improve
supply and inventory of manufactured products.
New
technologies improve inventory planning processes
The question
of how to manage inventory; which includes what and how much to stock, where to
place it and where to assemble or manufacture it; has never been more crucial.
Stocking the wrong product is another chronic issue that can contribute to
manufacturers failing to meet service levels with customers and partners, with
consequences that are arguably graver for the retailer.
Inventory
management grows even more pressing in times of economic stress because
virtually every company needs to gain better leverage from its working capital
by improving inventory turns, in order to grow revenues, hold down costs and
increase productivity. The adoption of technologies such as global inventory
management systems and advanced planning solutions, supported by business
process change where needed, are helping to grease the wheels of commerce and,
therefore, the movement of inventory.
Emerging
collaborative global inventory management systems are enabling manufacturers
and retailers to attain full visibility into their global inventory. Used in
many cases with inventory planning tools, global inventory management systems
interact with ERP to provide a near-real-time, end-to-end picture of inventory,
wherever it resides.
Rethink
inventory management strategies
For both
manufacturers and retailers, inventory stakes have grown exponentially, along
with customer expectations, especially on the consumer side. Although, not
every supply chain moves at the speed of Amazon, all retailers are feeling the
effects of the giant retailer because Amazon currently ships more of its orders
via its two-day offering than its free super-saver shipping today. Consumers
can no longer tolerate a one-minute wait in line for an ATM, and they cannot
wait to return purchases via the channel they purchased them.
See, any
retailer or other customer-facing company that get this wrong risks an army of
dis-satisfied customers taking to social sites to express their views loudly
and with effortless reach. Customers are not going to give you more time to get
the right products to the channel in which they want to purchase them. So, the
pressure is on the supply chain, buttressed by advanced planning and inventory
management capabilities, to pick up the slack while at the same time managing
customer expectations.
To cope with
the challenges, the company’s inventory management strategy should be revisited
often. Retailers and distributors are increasingly choosing to have vendors or manufacturers
hold inventory for them and fulfill customer orders directly. These choices
should flow directly from the company’s inventory management strategy, which
should be set at high executive levels and revisited often.
Reinvent
inventory management operations
Traditional
inventory management involves managing the highs and lows in supply and demand
but the today; the picture is much more complex. The ultimate goal is to create
the appearance of ever-present inventory, or the impression that an unlimited
supply of unlimited products is available.
Traditionally,
if a customer walked into a store and did not find the item on the shelf, it
meant lost sales for the retailer/manufacturer and dissatisfaction for the
customer. With multi-channel commerce in the picture, this is no longer true.
Today, an in-store kiosk can allow consumers to place an order for items
unavailable in the store, thereby avoiding a lost sale. Alternatively, a quick
look-up in the POS system can redirect the customer to another store in the
area that has the item. Even better is the “shop-to-home” option, in which the
item is dispatched quickly from a nearby distribution centre.
Rewire
inventory management systems
For
retailers, the foundation of rewiring inventory management systems is to
connect point of sales systems to back-end planning and order management systems.
This linkage enhances decision-making, as inventory choices are based on actual
data rather than nebulous forecasts. Data from online forums and communities
can be used to drive assortment and inventory planning in retail.
For example,
an online community of health-conscious people might talk about their
experiences with the latest model of a popular sneaker. The retailer and
manufacturer can mine that data for ideas on everything from inventory
placement, to customer support, to research and development.
No comments:
Post a Comment