Real-time inventory will be a reality this year once retailers realize that a rip-and-replace program for core systems is not the best, or the quickest, way forward.
Knowing your current inventory across the entire supply chain and in every store is essential to a successful omni-channel strategy; without it you carry excess inventory, risk losing sales or, worse, you disappoint customers by making inaccurate promises.
A seamless and painless omni-channel experience cannot happen “without knowing exactly where stock is in real time” said Computer Weekly. The reality is that while 76% of retailers see the need for real-time inventory information only 25% are happy with what they have today.
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 the omni-channel world inventory is more valuable than ever, but it has to be in the right place at the right time.
Along with other Internet of Things (IoT) enabled technology—a combination of RFID tags on items, store shelf sensors, smart displays, digital price tags and high resolution cameras—retailers can see what is where. From the store shelf to the back stock room, central warehouses and other stores, they can link these sets of inventory data for full visibility. If inventory is low in one store you can divert the goods from another store or ship them from a warehouse before the last item is sold. Control of inventory is one of the key areas where backroom retail operations are likely to be disrupted by IoT.
Other digital tools can help shift manual tasks away from employees and leave them free to better manage inventory. For example, Robo-Carts, guided by sensors and video cameras, let shoppers summon them using their smartphones, and then dispatch them back to the storage area when they are finished. Employees can then concentrate on filling shelves or working at checkout, rather than rounding up carts throughout the store and in the parking lot– or further. If these carts were connected to an inventory management system, they could even take a highly accurate real-time inventory as customers move them around the store. This is a great IoT use case.
Tackling the inventory challenge requires investment, but it can be attained quickly via real-time connectivity between different systems, including ERP, store inventory management, warehouse management and other inventory masters such as the inventory systems of suppliers.
Optimizing resources will allow you to distribute products – from ordering to pick-up and delivery – from any channel. This is truly maximizing return on resources.
But many retailers believe that the only way to achieve this is a wholesale rip and replace of core merchandising, warehouse and store systems - which can take anything between three and eight years.
Even if retailers do choose to rip out and replace their systems, these do not provide the capability needed for real-time inventory visibility. Part of the issue is that there are so many different systems that hold inventory in some form or other. Traditional ERP systems hold inventory at store-item level and are only updated once a day but customers need a much lower level of granularity.
Smart retailers will look for other approaches like using in-memory caching combined with high-speed integration technology in order to provide real-time inventory levels across every location, channel, store and shipment. Not only will they be able to deliver a solution quicker, but they will also be able to find their stuff in real time, keeping the customer experience a happy one.