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Tackling Supply Chain Issues

4 Modern Inventory Management Tips for Enterprise Retailers

01

Improve visibility and synchronization across the retail supply chain

Optimizing inventory visibility is crucial for businesses today. By utilizing modern inventory management software, businesses can aggregate data to provide a comprehensive view of inventory availability throughout the entire network. This enables them to minimize stock outs and order cancellations, meet service-level agreements, and enhance the customer fulfillment experience.

Real-time synchronization of inventory across sales channels and locations is a key functionality that businesses often lack. Without this capability, it becomes challenging to track inventory across a vast network and efficiently route products for fulfillment.

Syncing inventory offers more than just improved visibility. It enables businesses to manage buffer inventory levels, optimize available-to-promise (ATP) inventory, track inventory in transit, and analyze inventory positions by different channels or warehouses.

Accurate, real-time data empowers businesses to increase inventory turnover, reduce markdowns, and support various multi/omnichannel models such as buy-online-pickup-in-store (BOPIS), ship-to-store, and store fulfillment. Syncing inventory with e-commerce product detail pages (PDPs) also provides customers with precise information about available stock for purchase.

02

Use pre-ordering and backordering to aggregate demand effectively.

Businesses employ demand forecasting to analyze historical sales data, trends, and upcoming events, enabling informed decision-making for inventory planning and quick response to unforeseen circumstances. Demand forecasting is facilitated by ERP platforms or standalone software like Netstock, SAP Business Planning, and IBM Planning Analytics.

Modern OMS applications offer pre-order and backorder mechanisms to accurately assess inventory requirements and meet customer expectations. Pre-orders help build hype, gauge demand, and adjust inventory levels prior to product launches, reducing financial risks and generating anticipation. ATP inventory ensures availability for sale and anticipates future needs based on data-driven forecasts. With pre-order capabilities, companies can sell items before they are available and release them on specified pre-order release dates.

Backorders allow businesses to complete sales and retain customers while assessing inventory needs. Effective management of customer expectations is crucial. Communicating revised delivery dates promptly is key to maintaining positive customer relationships.

03

Embrace inventory control applications

A subset of inventory management is inventory control, or stock control. Inventory control ensures the optimal amount of supplies within a business. It also seeks to maximize profit while minimizing the total cost of inventory but still provides customers with products in a timely and efficient way without sacrificing customer satisfaction.

Modern inventory management software is often equipped with inventory control systems, making it easier for retailers to optimize stock levels and extend the data model to fit business needs.

A well-functioning inventory control system should allow companies to categorize inventory by attributes, locate items, pool inventory, and control the availability of stock to sell in each channel, market, or region. It should also allow them to set accurate and specific reorder points to replenish stock when needed. Companies can use software to plan for sales and stock-outs and prevent the buildup of dead stock, also known as unsold inventory that sits in storage and is not expected to be sold in the near future.

A few important software features that can help businesses achieve greater control over inventory include:

• Network aggregation of inventory
• Visibility into global, local, and available-to-promise (ATP) inventory
• Bulk actions to upload vendor inventory
• Low code/no code configuration of inventory management, multiple warehousing, and fulfillment rules.
• Custom inventory attributes and positions to categorize and organize inventory
• Safety stock and low stock settings

04

Invest in third-party inventory management software

Not all third-party inventory management software vendors are created equal. Because every business has its own unique requirements, companies that want to eliminate manual spreadsheets or abandon legacy inventory management applications in favor of modern inventory management software should assess the market to see what offerings suit their individual needs.

Some important questions to ask when considering a modern inventory management system are:

• Does the inventory management system easily connect with any enterprise resource planning (ERP) software, customer relationship management (CRM) software, or warehouse management system (WMS)?
• Does it work closely with order management processes?
• Does it easily integrate with your favorite applications using an open application programming interface (API) model?
• How long does it take to get the system up and running?
• Does it provide real-time updates on orders and inventory positions?
• Can the system add or remove warehouses quickly?
• Does it offer the latest features?
• How much does it cost? A complete TCO analysis of software is critical before any decision can be made.