During the recent pandemic, the retail landscape has witnessed a significant paradigm shift in consumer behavior like decreased foot traffic in stores, increased eCommerce purchases, etc. This prompted many retailers to utilize the inventory available in the stores and across the fulfillment centers making it available across the network.
Retailers now have multiple channels to interact with customers, such as online stores, mobile apps, customer service, buy online, pick up in store/curbside, and buy online, ship from store/distribution centers (DCs) scenarios. To make any of these new feature’s work, the most important thing is presenting an accurate inventory picture across all the channels in real time. Any discrepancies could cause delay in shipping times – increasing the likelihood of cancelled orders due to a bad customer experience.
Buy online, ship from warehouse and buy in store have been conventional methods that retailers used to sell their products to customers. With the evolution of technology and Gen Z gaining more buying power, there is an exponential growth in eCommerce and mobile app orders and increasingly higher expectations for a retailer to fulfill the order within the promised delivery window.
In simple terms, Available to Promise (ATP) represents how much stock you can promise to the customer and real-time inventory visibility is a way of presenting ATP inventory across the retailer supply network to all order capture channels in real time. ATP is generally a difference between total supply from all fulfillment locations and the total demand from various channels taking safety stock and capacities into account.
3 Key Challenges Retailers Face Related to Inventory Visibility
With a growing need for more fulfillment options and channels, here are some of the key challenges that retailers face related to inventory visibility:
- Underselling and Overselling: Inaccurate inventory data often causes underselling and overselling situations, resulting in longer wait times, incorrect forecasting, high inventory carrying costs, and lower customer satisfaction.
- Lack of Full View of Inventory: Communicating with existing supply networks like DCs, vendors, and stores and ensuring optimal inventory is available across these channels has been one of the few key issues the retailers face today.
- Scalability: Scaling a business can often be impacted by the delays and failures in processes and systems catered for different functions such as the order fulfillment, inventory control, customer service, etc.
Benefits of Real-Time Inventory Visibility
With real-time inventory management, it gets easier to track inventory levels and know when to replenish items to meet demand without overstocking and increasing holding costs.
Fig. 1 Key Benefits of Real-Time Inventory Visibility
Key benefits of real-time inventory visibility include:
- Improved customer satisfaction
- Improved cash flow
- Improved response time and service recovery
- Improved performance metrics
- Optimal inventory levels
- Increased return on assets
- Better forecasting
Real-Time Inventory Visibility Architecture
A typical architecture for real-time inventory visibility includes an OMS that captures inventory supply from various sources like ERP, WMS, and POS and orders from different channels like eCommerce, physical stores, call center, and marketplaces. The OMS then calculates the ATP and publishes this information to all the order capture channels synchronously or asynchronously.
Below is one example where a retailer is able to display different fulfillment options for a product on their website based on the real-time availability presented by the OMS. These options are then dynamically updated based on the customer’s ship to address and the inventory availability across stores, DCs, and vendor locations.
Real-time inventory visibility is being adopted by most of the top retailers to ensure better visibility and a better customer experience, which in turn improve the brand loyalty and value. With a cloud-based OMS from Kibo, retailers can achieve a much faster speed to market. In addition, Kibo Order Management scales as per the demanding needs for the retailers and can be the perfect solution for now and for the future to overcome the real-time inventory visibility challenges.
