Retail Inventory Management has assumed a lot of importance especially during the current COVID 19 pandemic times when all kinds of food and nonfood items were sold online on a very large scale. On the flip side, it had led to stock outages, broken supply chains, uneven distribution and unavailability of products. A lot of distributors and retailers were taken completely by surprise by the surge in online orders as they were not prepared. Optimum Inventory Management and Timely/ Safe Delivery became the two most critical challenges to address. With this background, this article tries to suggest solutions to the challenges using the latest technologies and scanning of latest trends that are doing the buzz.
The following are the most happening latest trends that we will analyze
- Automation - AGVs and AMRs
- AI based Demand Forecasting
- Omnichannel Inventory Management
- Hybrid Warehousing and Drop Ship
- Third Party Logistics (3PL)
Automation AGVs and AMRs
Automated guided vehicles (AGVs) and automated mobile robots (AMRs) are robotic tools to help warehouse operators collect products from decks and pallets efficiently, accurately and in a timely manner. While AGVs have been around for a while, AMRs are newer on the block.
While AGVs follow fixed path through a warehouse, meaning that they aren’t great fits for facilities that change their floorplans or have a lot of people moving around. AMRs are among a new class of “collaborative robots,” that don't need to rely on fixed routes to navigate a space because they include smart sensors, like those used in self-driving vehicles.
ML and AI based Demand Forecasting
Before we embark upon Machine Learning (ML) and Artificial Intelligence (AI) based demand forecasting one needs to have good amount of transactional historical/heuristic data as a prerequisite.
Machine Learning (ML) is being applied to study the heuristics of the past performance, add additional inputs like market conditions and current trends to suggest predictions using Artificial Intelligence (AI) neural networks and Deep Learning.
Also, to clarify a concept, systems with artificial intelligence (AI) and machine learning (ML) capabilities work hand-in-hand with those Internet of Things (IoT) devices. Machine learning comes handy and can be employed to make sense of the unstructured data like product images, videos shot, and the data produced by all manner of sensors and scanners. Machine learning could be employed to spot out defective products or packaging so that customers only get quality items.
Omnichannel Retail Inventory Management
To drive home the point, one of the recently used omnichannel models is Buy Online Pickup in Store (BOPIS) wherein a customer can look online to see whether a given item is available in a nearby physical location, make the purchase then walk into the store and pick up the item. Simple, well you got to make sure that the price of the item on the shelf is the same as what the buyer paid.
Omnichannel retail inventory requires a single truth seamless system among store, distribution center and ecommerce operations to reconcile physical and online inventory and ensure price and discount or sale parity. Businesses need to make sure they have a connected supply chain, a near-real-time inventory reconciliation process to provide visibility, advanced demand planning, highly accurate order fulfillment, data analytics and tracking and distribution centers close to where customers are.
Hybrid Warehousing and Drop Ship
A hybrid warehouse combines multiple typical activities like storage, picking, shipping with some not so common drop ship location usage. Retailers today partner with Third Party Logistics (3PLs) to store inventory and ship orders directly to end customers, adding a hybrid layer to traditional
warehousing and shipping which is called as Drop shipping, where a retailer never takes possession of stock but pays a manufacturer to send items direct to customers, can also have a hybrid flavor when a retailer chooses to stock in store a small number of popular drop-shipped items so it can offer premium shipping options.
Third Party Logistics (3PL)
Third-party logistics, or 3PL, is when distribution and delivery is outsourced to a third party logistics and courier services company. These services may help businesses reach more customers or operate more efficiently without incurring the costs that come with infrastructure development.
The key to success with 3PL is to connect all production sites, including the manufacturer and 3PL provider, such that they operate as a cohesive supply chain.
More ecommerce also means more returns, aka the reverse supply chain, represent a growing drain on profits. Contracting with a 3PL for example for returns handing could reduce costs because these firms tend to deliver economies of scale, including better rates with carriers, and processes tuned to execute returns as inexpensively and efficiently as possible.
Conclusion
As it is evident from the latest trends discussed above, application of advanced technology and digitization is of immense importance and has assumed a critical role in driving businesses towards their goals. The next obvious question would be, how does all this convert into an implementation approach and what all one needs to cover in the whole strategy?
The following is a checklist of items to look for in any retail inventory management software solution
- Should Track every change in inventory – Receive Goods, Stock Transfer, Sales, Returns, Repairs etc.
- Get accurate count by batch number, expiry date and any attribute like color, size, thickness, date of manufacturing, brand, vendor and batch
- Configure alerts for low inventory, expiry, seasonal demands
- Value inventory @ cost (Weighted average PO, FIFO or standard costing) or at sales price.
- Easy stock take using manual sheets, laptops or PDAs.
- Track quantities on order, on hand, in transit and reserved.
- Have Machine Learning, IoT and AI Capabilities
For carrying out most of the tasks mentioned above you need a comprehensive and robust inventory management IT systems.
Posibolt is a leading provider of Retail ERP, Inventory and Point of Sale (POS) solutions across retail formats and variety of Distribution Centers whose customers are spread in 10 countries across Africa, Europe, Middle East and Asia.