Sharpening Omnichannel Inventory Management to a Razor’s Edge
Inventory is your company’s largest capital investment. It is why customers make purchases in your stores and online. It is the source of your company’s revenue and the bedrock of your brand. Naturally, it makes sense that fine tuning inventory management is a key to achieving financial success.
And yet, with so much riding on inventory management, it is surprising that many retailers struggle to master their supply networks, which extend from source to shelf through a matrix of nodes, flows, transportation modes, third-party providers, and technologies that are not up to the job.
To make inventory management an even more complex task, a proliferation of digital sales channels – online, mobile, social media and marketplace platforms – has been added to the supply matrix.
72% recognize omnichannel inventory management, a holistic strategy that enables effective management across sales channels and internal departments, is critical for meeting financial goals.
Nearly half of retailers (49%) report they only have a "few advanced systems and processes" in place to achieve smooth, accurate and cost-effective omnichannel inventory management.
Topping the problem list are inaccurate inventory at the item level, out of stocks, and over stocks. Each of these problems can bleed money, but if improved can be a source of strong performance gains.
Digital sales channels are challenging for retailers because digital orders occur before consumers take possession of their purchases. A consumer could be in Idaho and the item in one of many locations scattered throughout the supply network. And yet, the product must be rapidly identified, marked as sold, designated for shipment, and moved out on a journey to the consumer as soon as possible.
Two big mistakes can occur when omnichannel inventory management systems go awry: items run out of stock (either in total or in various locations in the supply network) and, on the opposite end of the scale, excessive safety stock is held to cover mistakes. For both of these reasons and many other, there is an urgency for retailers to hone omnichannel inventory management to a razor’s edge.
In this Targeted Research report, we examine the importance of omnichannel inventory management and how it supports key financial goals and customer satisfaction.