What is Retail Inventory Management? How to Master it?
As a brand owner, do you often find the merchandise your customers are searching for is either out of stock or misplaced? Systematic inventory management ensures a smooth customer experience and a coordinated flow of stock across the supply chain to avoid errors like inaccurate order picking, delayed order fulfillment, missed shipments, etc.
COVID-19 highlighted loopholes in the legacy solutions and the lack of agility and flexibility in supply chains. Fulfilling the increasing demand for omnichannel commerce requires new-age inventory management solutions that help in:
- Optimizing storage space
- Preventing the accumulation of deadstock
- Fulfilling orders accurately and on time
- Avoiding spoilage of perishable consumable items
- Increasing sales by enhancing customer experience.
4 Efficient Inventory Management Techniques
- JIT (Just-in-time) Inventory Management
The process of procuring raw materials from suppliers, as soon as an order is placed and managing on-time production schedules is called the JIT method. It prevents overstocking or deadstock and is an excellent way of eliminating high inventory costs.
Increff Merchandising solution is enabling one of the leading eyewear brands to fulfill both JIT and OTC (over-the-counter) merchandise simultaneously in an automated fashion.
- ABC Analysis Technique
ABC Analysis is a way of categorizing goods based on their value and the company’s profit.
For example, marketplaces like Amazon categorizes item listings on their portal based on this technique:
- Category A: Most valuable items that offer the highest profit and exceed target margins are listed first.
- Category B: The wide range of goods that fall in between categories A and C.
- Category C: Items that make profits to meet targets but don’t make much difference individually.
This helps marketplaces maximize profits by understanding which items to prioritize on their portal.
Increff WMS, our efficient Warehouse management and order fulfillment solution has reports that can help brands analyze sales across all B2B and B2C channels and improve delivery efficiency. Inventory serialization helps to track individual pieces accurately. It improves picking accuracy and facilitates faster order fulfillment which helps brands gain a higher customer satisfaction score and greater visibility on marketplaces.
- FEFO for limited shelf-life products
FEFO is a stock rotation technique to prevent stock loss due to expiration or obsolescence. Assigning expiry dates to batches, allow brands to track each batch accurately so retailers know when to push which stock from the warehouse to the store. It is used in industries like e.g. beauty, pharma, and consumable goods dealing with limited shelf-life products for inventory optimization and minimizing waste.
The new expiry feature in Increff WMS allows brands to set quality benchmarks at the batch level by triggering notifications when a batch is going to expire. It enables retailers to channelize sales to various points of sales accordingly, and ensure a majority of the stock is sold within the desired timeframe.
- EOQ Technique
The EOQ (Economic Order Quantity) technique considers factors like customer demand, ordering cost, and holding cost to calculate the proper levels of inventory. Customer demand is based on factors like trends, seasons, and internal factors like marketing strategies, offers, etc. Ordering costs are usually stable and decrease if you order the inventory in bulk. Holding/carrying costs generally depend on the amount of inventory in hand. This allows brands to stock optimal quantities at minimal costs while ensuring a smooth flow of business.
Increff Merchandising solution smart assortment planning capability involves tracking and measuring individual style performance, at the granular level, to define the ideal store-wise assortment plan that caters to the local customer demands. It helps prevent loss in sales opportunities and increases inventory turnover by identifying NOOS styles and highlighting non-moving dead styles to improve overall inventory health
Now is the time for omnichannel retailers to gear up and adapt to efficient inventory management techniques to increase agility in their supply chain and improve inventory accuracy. It presents a huge opportunity for them to offer their best merchandise across all sales channels, at a competitive price and clear their stuck inventory making room for new launches.