KEY COMPONENTS TO KEEP UP WITH SKYROCKETING BUSY SEASON DEMAND
Inventory management horror stories that clog newsfeeds make one feel that The Grinch is now running supply chain, not Santa. According to market researcher International Data Corp. (IDC), the supply shock that started in China early in 2020, and the demand shock that followed it as large swaths of the global economy shut down, exposed vulnerabilities as well as resiliencies in supply chains around the world. Retailers, the research firm finds, faced supply and demand disruptions, navigating inventory held up in factories, global lockdowns, evolving trade policies and surges related to hoarding behaviors for essential items such as toilet paper.
IDC’s report on the implication of COVID-19 for the future of the retail notes that retailers were confronted with accelerating e-commerce sales and rising demand for safe shopping, transparency and omnichannel fulfillment. And they faced massive economic shifts resulting from high unemployment and shifting shopping patterns, including the massive losses in shopping resulting not just from changes in everyday habits but also from decreased travel activity.
The crunch showed once again that to meet customer demands and stay competitive in a world where expectations for product availability and delivery speed continue to rise, every link along the supply chain must operate efficiently. From warehouse management to order fulfillment to juggling multiple channels, there are often countless points in a single product’s journey where eliminating errors and delays could mean increasing profit and optimizing the customer experience.
“While it’s painful for grocery retailers to order products from hundreds of discrete suppliers, it’s also painful for the suppliers to receive orders and payments from hundreds of retailers that are not communicating by digital means,” says Robert Pinkerton, CTO of Vori, a technology platform and digital marketplace for retailers. “They’re sending emails and faxes, calling the order desk, texting sales reps. … the list goes on and on.”
Here are just a few ways businesses can use the right solutions to quickly adapt to changing demand this season:
One of the fundamental ways to ensure this happens is to improve inventory visibility: the ability to see the status of every SKU across all locations (warehouses, stores, suppliers and third-party providers) in real time. The key to having full inventory visibility is to leverage a supply chain network connecting all stakeholders.
Having accurate inventory insight isn’t just great for your customers and trading partners; it’s also beneficial for overworked and overstressed teams. Manually tracking inventory is a mundane way to use employee time and detracts from their ability to build better customer and partner relationships. Plus, it can result in out-of-date information that makes decision makers’ jobs more difficult.
When both suppliers and retailers have real-time inventory data at their fingertips, they eliminate common time and cost efficiency drains. By integrating and automating inventory information, businesses get a leg up on improving internal processes. That’s because real-time inventory data is immediately actionable and helps to make better decisions, allocate product optimally and streamline transactions with your supply chain partners.
For e-commerce businesses, knowing their inventory levels makes it possible to sell across multiple channels, while giving customers accurate availability information. Instead of frustrated customers, e-merchants create satisfied ones.
Stockouts are customer loyalty killers and having better inventory visibility helps merchants avoid them. Modern inventory management platforms help by using historical data to better predict how much product is needed where and at what point in your business cycle. Using current data in real-time makes it possible to maintain healthier, more balanced inventory levels in all the places where the goods need to be.
Full data trove control helps create timely, smarter replenishment strategies and better respond to volatile demand hikes—without devolving into chaos.
Many supply chain players are leveraging powerful technology solutions to better manage order processing, warehouse management and fulfillment. But many others still use separate, siloed solutions that don’t provide enough visibility. Unified commerce solves this problem by bringing omnichannel operations together using integrated technology.
Comprehensive visibility relies upon a central “inventory hub” that acts as the aggregator of inventory information across the extended enterprise–products in the warehouse or in transit to it, at a third-party logistics provider (3PL), in a returns facility and even in the finished goods warehouse of a supplier.
Ideally, such a hub should also include inventory positions and movement within each retail location. This gives businesses the advantage of up-to-the-minute product availability so that features such as available-to-promise (ATP) can help suppliers allocate products in short supply, providing valuable fulfillment transparency for partners.
Another tool to improve retail partners’ supply chain visibility is called vendor-managed inventory. A modern VMI platform offers insight into stock levels at retail partner locations and establishes automatic reordering thresholds, so products arrive just in time. This keeps warehouses lean on both ends and improves the customer experience with fewer stockouts.
Advanced VMI features leverage your data to an even greater advantage. This is crucial in an environment where customers are choosing products that can be delivered the next day or even the same day.
An integrated e-commerce platform is another way to improve inventory visibility to everyone’s benefit. With online shopping on the rise, it is important to give customers accurate information about what is available. After all, no customer wants the experience of hitting “order,” and then receiving an “oops” email due to out-of-stocks.
Ideally, the aforementioned “inventory hub” should be working in conjunction with an organization’s e-commerce system so digital buyers always see the correct availability. All of this results in minimizing the chance of an “oops” moment and helps the “order hub” or ERP system determine the most cost-effective location, time and shipping method to get the order filled.
With an excellent ROI and measurable benefits for all parties involved— retailers, suppliers and customers —leveraging technology to increase your inventory IQ is a smart way to dethrone The Grinch and empower supply chain Santa yet again.
Haitham Ghadiry has been the vice president of Sales and Marketing at TrueCommerce, Inc. since joining in December 2009. Mr. Ghadiry oversees marketing communications, demand generation, new customer acquisition, install-base account management, professional services’ sales, sales enablement and indirect channel sales.
Prior to joining TrueCommerce, he served as director of Global Sales and Strategic Accounts for Trimble Navigations, Ltd., a publicly traded supplier of advanced location-based solutions, and director of North American Sales at Everest Software, a leading business management software provider. His extensive history of generating superior sales results and leading top performing teams will contribute to further propelling TrueCommerce into the market leadership position. Haitham graduated with a bachelor’s of science degree in Tourism and Hotel Management from Helwan University in Cairo, Egypt.