After employees and “store estate”—physical and online premises—inventory is arguably the most valuable resource a retailer has. Without it, the retailer cannot trade. In today’s omni-channel world, inventory is more valuable than ever but it has to be in the right place at the right time – or the business will suffer.
In the old single-channel retail world, if a product was not on the shelf, the retailer would miss an opportunity to sell it. In the omni-channel world, the opposite is true. A product could be on the shelf of your store, but if a customer wants to order it online for next-day delivery you could lose the sale.
One way to prevent this disconnect would be by providing the customer with insight into inventory at his or her local store or other locations, with the option to pick it up there. This may sound obvious, but many retailers on the omni-channel journey cannot offer this. According to Information Age, 71% of consumers expect to be able to do an online inventory check – but only 32% of retailers offer the ability to do this.
Inventory visibility is a cornerstone of omni-channel as it enables dynamic decisions on where online orders are fulfilled. Optimising inventory means having visibility into every product in every location at all times, along with the ability to adjust operations accordingly. Management information dashboards can be used to evaluate inventory right now to drive important business decisions. That way supply chain planners can better understand supply/demand and spot inventory deployment opportunities.
For example, if an online order comes from someone in Boston, Massachusetts and there is plenty of stock in a nearby store branch, the order could be fulfilled from that branch rather than a remote warehouse in Iowa.
As Retail TouchPoints, an online publishing network for retail, notes: “Complete inventory visibility helps retailers optimise product distribution to allow ordering, pick-up and delivery from any channel.”
And retailers understand the value of this information: RSR Research says that 93% percent of them see a lot of value in having good inventory visibility. However, of those, only 45% believe they have a lot of visibility.
Tackling the visibility challenge requires investment, but it can be attained quickly via real-time connectivity between different systems. This requires flexible connectivity between enterprise resource planning (ERP), store inventory management systems, warehouse management systems and other inventory masters such as the inventory systems of suppliers.
To attain a real-time view, a real-time inventory data store using in-memory technology is required in order to incorporate the impact of sales, goods received and inventory movements—minute by minute. This in-memory data acts as the real-time inventory master for the entire omni-channel operation at all times.
Optimising your resources will allow you to distribute products – from ordering to pick-up and delivery – from any channel. This is truly maximising return on resources, our second milestone on the omni-channel journey. The third milestone is taking what you have learned on your journey to “conduct” your omni-channel “orchestra.” Stay tuned.
By Oliver Guy, retail industry director at Software AG