Improving Operations with Inventory Visibility
This post was written by SalesPad partner SPS Commerce. We’re delighted to share their insights on how inventory visibility is improved when operations are strengthened.
Written by Matt Brolsma, Strategic Product Marketing Manager at SPS Commerce
Inventory visibility, or knowing the location of, quantity, and movement of product, is an essential component of running a successful retail operation. The absence of it can be quite painful for retailers. Without it, operational inefficiencies occur from missing or incomplete packing data, shipping information, or wholesale item data, resulting in in an inconsistent customer experience and excessive inventory holding costs.
These blind spots to inventory availability and quantities make retailers respond reactively vs. proactively. The result is reduced inventory turn times, hasty warehouse planning, stock-outs, and excess inventory. The lack of inventory visibility and these related actions erode efficiencies and profitability.
Visibility into supply chain operations is essential
Modern order fulfillment operations are complex, as consumers demand more options and rapid delivery. Inventory management now includes numerous touch points across the supply chain, including the distribution center, in-transit orders on trucks, store shelves, stockrooms, and more.
Order accuracy is critical to running a successful operation and ensures that your inventory records reflect reality as it relates to stock, order monitoring and tracking, and more. Unfortunately, part of the challenge is confirming, with accuracy, that vendors have fulfilled orders as promised and all items are received and indicated in the stock ledger.
Poor visibility impacts operations
The reality is that acquiring consistent, accurate, and timely data is now foundational to successful inventory management. Retailers are quickly moving away from a status quo where they accepted limited or no visibility. The recent pandemic has proved how necessary it is to always have real-time inventory insights in order to make strategic business decisions. Today’s challenges are more apparent than ever:
1.) Item Data: Manual oversight is required to address incomplete or missing item details that depend on this data. This challenge results in:
- Redistributing items to an appropriate warehouse location
- Stockpiling more inventory than needed
2.) Packing Data: Companies recognize additional operation costs due to incomplete or missing packing data. Manual inspections and the pain-staking process of matching packing slips to invoice to packed boxes is costly. This challenge results in:
- Re-labeling information to match what is in the box
- Manually opening and inspecting orders
3.) Shipping Details: A distribution center cannot operate smoothly without visibility to inbound shipments and orders. They need to know what is arriving from vendors, and when. Without shipping details, they can only react to the situation, instead of being proactive in how they schedule staff and manage the yard. These actions add up to unforeseen costs and inefficiencies. This challenge results in:
- Hiring additional staff to track missing inventory information
- Manually opening, counting and unpacking shipments
4.) Compromising Customer Experiences: Products stuck in receiving are not available for sale. Customers don’t want to hear about out-of-stocks or delays and will likely go elsewhere if it happens. Without accurate shipping information, products can’t reach consumers at the speed required, resulting in dissatisfied customers. This challenge results in:
- Creation of incentives to win back unhappy customers
- Increased freight costs to meet demand
Inventory Visibility transforms entire operations
The advantages of inventory visibility can be experienced throughout the business. When accurate inventory and shipment data is used across the supply chain, everything runs efficiently. From improved customer loyalty to reinforced trading partner accountability, everyone wins in an automated process.
As a full-service provider, SPS Commerce has been helping retail companies gain inventory visibly within their supply chain for more than two decades. The SPS Community Solution removes supply chain inefficiencies between retailers and vendors by facilitating the accurate and timely exchange of data. This delivers inventory visibility at every stage of the order process.