September 28, 2023 | Supply Chain

Effective inventory management ensures that a business has the right items in stock, at the right time and place, and is able to fulfill orders on time for a profit. Customers expect seamless and consistent experiences across channels they use to interact with brands. They want to know which items are in stock and where, they want multiple fulfillment options, they want to know when their items will be ready for pickup or delivery, and they want easy returns.When retailers fail to meet these expectations, they risk losing a customer’s business — for good.

Omnichannel order management means providing the infrastructure for customers to shop in the manner that they choose including:

  • In-store purchase
  • In-store purchase for home delivery
  • Purchase online for delivery
  • Purchase online for pickup
  • Purchase through mobile app or chatbot

Regardless of the chosen shopping method, the customer expects a consistent and seamless experience. Unfortunately, all of these different shopping channels and fulfillment options can make inventory management infinitely more complex and any number of things can go wrong before the order is delivered.

The frequent challenges retailers face in adapting their inventory planning processes to win in this new omni-channel world would be:

Accurately forecasting omni-demand

A number of factors influence demand forecasts including seasonal sales cycles, commodity prices, macroeconomic factors, and more. Accurate demand forecasts contribute to optimal levels of inventory and the dispatch of products to market at the most profitable price points. To use demand forecasts to your advantage, your business needs to collect and analyze historical data on sales, purchase orders, and inventory turnover. Without a single platform to collect and organize data, accurate inventory visibility will likely be impossible. Identifying and forecasting omni-channel demand via order management system integrates data from multiple business functions leading to effective supply chain management and hence improved customer satisfaction .

Accuracy and Tracking

As you increase your number of sales channels, you also increase the risk of incorrect data. It becomes harder to track your inventory, but a lack of visibility means you can’t carry out accurate reporting or keep customers informed about stock levels.

Demand Planning

Incorrect demand forecasts will leave you unprepared for fluctuations in traffic, so you could experience obsolete stock or stockouts. It’s crucial that you collect and analyze data for all sales channels, to see which items are going like hot cakes and which are sitting on the shelves.

Systems & Technology

find a solution that seamlessly synchronizes inventory and sales data across all channels, and integrates with your other business systems for a unified approach. Inventory management software with automation will help you track orders, generate shipping labels, and ensure that inventory levels are adjusted whenever you make a sale.

High inventory storage costs

Omnichannel inventory management needs smart inventory management that avoids wasteful dead stock and higher storage costs. Smart demand planning that feeds into inventory levels helps negate this and helps ensure that margins meet expectations.

Serial returners

When customers buy online, they are much more likely to return items, it’s important to consider an increasing return ratio as a critical factor in forecasting and inventory planning both at stores and Distribution Centres.

Safety stock

Safety stock is extra inventory a business holds to guard against the risk of shortages, stockouts, and missed sales. Safety stock is important to ensure your business can fulfill orders, but at the same time, more stock increases inventory holding costs and cuts into business profits. Without accurate inventory records, a business will struggle to hold the optimal level of safety stock and is at risk of missing reorder points.

If there’s one thing that’s vital to an omnichannel approach, it’s connectivity. The best way to achieve that is to integrate all the different parts of your supply chain—from the suppliers who bring goods to your fulfillment center to the staff who process returned items, and everyone in between.

Inventory management serves as the invisible thread that binds together various facets of a supply chain. Its far-reaching influence extends across industries, impacting operational efficiency, customer satisfaction, and financial performance. Businesses that adapt to technological advancements, harness the power of data analytics, respond to shifting consumer preferences, and implement efficient supply chain strategies are leading the way in improving inventory management practices. Embracing these practices not only directly benefits businesses but also contributes to the overall health and resilience of the global supply chain ecosystem.

To optimize inventory and achieve long-term success, businesses can effectively implement supply chain strategies by collaborating with reputable third-party logistics (3PL) providers possessing extensive experience and capabilities. TVS Supply Chain Solutions, a prominent 3PL company, strives to be a proactive supply chain partner, leveraging technology enhancements throughout the process. With a wealth of experience and capabilities in managing intricate supply chains as a 3PL/4PL player, we are well-equipped to support our clients.

At TVS SCS, we capitalize on our extensive operating history and knowledge base to assist our clients in creating efficient, digitized, and scalable inventory solutions while unlocking future growth potential. Our inventory management system seamlessly identifies data trends and seasonality, and our experts effortlessly pinpoint outliers. Our demand forecasting system incorporates bespoke algorithms to manage various inventory facets, including slow-moving items, lifecycle planning, and asset applicability.

POSTED ON September 28, 2023