Improve Inventory and Product Availability with Digitization
By Jett McCandless, CEO and Founder, Project44
Monitoring inventory can be a challenge. Maintaining the right stock levels—keeping enough inventory to avoid stock outs without bloating—has a lasting impact on both your bottom line and consumer happiness. Some experts estimate that $1.1 Trillion is tied up in inventory nationwide. To put that in perspective, that’s about 7 percent of the U.S. GDP tied up in inventory, largely resulting from improper management.
You already know this is a problem, and you know it can be fixed with better data. Still, most retail CIOs have been unable to secure the right information at the right time. 90 percent think real-time information is the key to success, but less than 39 percent have access to accurate shipping data.
Efficient Flow of Information
Inaccurate data is the bane of existence for most retailers. Inventory levels are constantly fluctuating due to inconsistent shipments, returns, misplaced inventory, and countless other factors.
Deploying automation technology across your end-to-end logistics and transportation network allows for accurate, real-time information to be shared widely. It allows you to keep track of shipments down to the exact number of units, providing you with total visibility into your supply chain. Automation technology, when leveraged to its full potential, allows you to eliminate stock outs without bloating inventory.
Imagine keeping the exact amount of inventory on hand that you need—no more, no less. Imagine an automated system that knows when you’re running low on a certain product, and knows exactly where your in-transit products are by leveraging factors like geolocation, traffic, and weather to better manage the fulfillment of replacement stock at the exact right moment. That’s what’s possible with digitization.
One of the main reasons product availability can get so complicated is the multi-modal supply chain. While the benefits of a multi-modal supply chain far outweigh the drawbacks, it does add a layer of complexity, and more complexity means a higher likelihood of errors.
"Automation technology, when leveraged to its full potential, allows you to eliminate stock outs without bloating inventory"
With legacy technology like EDI and manual processes, multi-modal supply chains are too complex to effectively manage the movement of your products. The more modes you are using to ship, the harder it is to keep track of what’s coming in, and when it’s arriving. However, if those modes all connect with a single API-based access point in a single management system, all your data is in the same place before it gets to you, and it gets to you in a matter of nanoseconds.
One of the larger misconceptions about digitization is complexity. The idea of implementing an entirely new technology strategy seems daunting to a lot of companies, especially in an industry where the technology has remained behind the times for many years.
In reality, the legacy technologies that have powered the logistics and transportation industry for decades are more difficult and expensive to setup and maintain. They simply don’t have the framework to be built into new solutions, and things like automation and real-time data are next to impossible to implement. As a result, technological bridges need to be built in order to extract what little data legacy technology can provide. We’ve reached a point where the hassle far outweighs the payoff.
The SaaS technologies that empower digitization are designed to be easier to setup, and they require very little maintenance. In fact, the best third-party technology vendors handle most of the maintenance for you, which frees up your IT team to focus on other things more relevant to your business. It is extremely important that you factor in scalability while designing your digitization strategy. Your technology solutions should be built on the latest frameworks, allowing for unprecedented speed, agility, and rapid change.
The benefits of digitization are comprehensive when it comes to better managing product availability. They go far beyond inventory management, though that is one of the areas that will see the most improvement as the retail supply chain undergoes this technological revolution. The key is going to be getting the industry on track towards digitization, and making sure you partner with the best SaaS technology vendors, and that your partners do the same.