Omni-channel retailing puts conventional inventory management systems under pressure. Multi-channel retailers will be selling products from some or all of the following: their brick and mortar stores, their website, channels such as eBay, Amazon, Walmart, Etsy & perhaps over the phone. Maintaining an accurate single version of the truth and ensuring that is linked to all channels is crucial. Cancelling orders on Amazon or eBay because of being out of stock for example will negatively impact on seller ratings, ranks and sales and so inventory levels must seamlessly sync between all channels with stock outs and replenishments instantly reflected across all channels.
Holding too much stock ties up capital and creates a need for expensive unnecessary warehouse space. Carrying too little results in stockouts and lost sales. In the context of PPC advertising, stockouts can be particularly damaging as retailers pay per click to bring users to pages that have stockouts. Conversion rates drop and so ROAS is undermined.
A screenshot of a hosted centralised inventory management system linked to every channel that the retailer sells through.
In order to successfully pursue a JIT approach to inventory management, clean and real time data is crucial. At Symbeirty, we have extensive experience and expertise in setting up an IT infrastructure that puts this data at the fingertips of buyers. Capital can be freed up while simultaneously more revenue can be driven through a given warehouse size than before.
Past sales data can be used to forecast future sales to inform JIT inventory management.