With business growth comes a ship in distress inherently known for inventory mismanagement. 4 mistakes are regularly committed by e-Commerce businesses. 4 solutions hold the potential for increased competitiveness thus in a one-stop manner.
To achieve sustainable growth in e-Commerce business, one has to give priority to Standard Operating Procedures (SOPs) that includes inventory management in order to carry out daily routines with agreed-upon best practices in the most streamlined fashion possible, and thereby, with minimal operational glitches and wasted resources. With interactive SOPs in place, operations can be implemented with optimal 2EFs (efficiency and effectiveness) and the real, new Lean, asset requirement can be identified. In other words, asset requirement based on inefficient-ineffective operations, i.e., without fine-tuned SOPs, reflect underrated core competencies and exaggerated operational requirements that result in unsustainable practices that require more of the same in a compounding manner into the future. Indeed, the common mistake is normally found in e-Commerce with inventory mismanagement.
1. Order Diversity
Forgetting that orders come from diverse sources sounds like a simple unforgivable mistake to the customer but, surprisingly, a pretty common one among deliverers. At the heart of retail lies the ability to satisfy customer needs be it preferences in the product, purchase and order detail or distribution channel. That’s why e-Commerce stores need to have available a complete variety of sales and distribution options. What businesses need to watch out for, then, is how to manage inventory while the system in place keeps track of stock pile in real time and maintain a sufficient level to cover outstanding as well as future and returned orders through various sales and distribution channels. The ability to do so will prevent simple delivery glitches.
2. Sales & distribution diversity vs. one–stop management system
Understanding that diverse sales and distribution channels require diverse management capability in a single, one-stop, platform is fundamental. Separate management systems for each individual channel might not be the answer because the method has, not only proven to be a management commotion, it is also very capital intensive. A centralized system that can audit ready-to-sell inventory in each sales and distribution channel together with real-time inventory updates is essential for any business that wishes to remain competitive in the age of IoT where customers have a limited time and no longer tolerate inefficiency, let alone ineffectiveness, especially for things that should be easily done.
3. Near real–time stock update
In cases where inventory in the system and/or where actual purchased orders exceeds the existing inventory, there’s a good chance that at some point orders will not be fulfill-able. On the contrary, when the existing inventory in reality exceeds the inventory in the system, chances are that opportunity costs will be incurred as the business loses sales, unnecessarily. Thus, near if not real-time stock updates are fundamental for e-Commerce, i.e., doesn’t work without it. As such, the next logical step is to acquire predictive analytics to ensure optimal inventory management.
4. Forecast orders vs. wrong assessment
Inventory management 2EFs leads to the ability to accurately assess the number of future orders and thereby appropriate inventory levels. On the flip side, too much inventory at the wrong time in the wrong geographies with leftover stockpile as a result of insufficient orders, or, too small an inventory in the right place at the right time, is exactly what kills retail. Predictive features thus is also fundamental for one of the most important things in retail – accurate inventory.
Every business that manages to maintain a balanced supply and demand can remain operational. For the business to survive, let alone thrive, that is, it has to, first, be able to provide satisfactory products and services that meet customer needs – efficiency. Second, it has to do so with sustainable assets and operations that optimizes core competencies without over committing resources in the age of ever changing market sentiment – effectiveness. Big data, including predictive features and feedback reviews, to manage everything from a one-stop user-operator friendly platform in real time streamlined fashion has become the new normal, if for any reason at all, because it is both feasible and safe for everyone to do so.
Compiled by BLOG.SCGLogistics
References and photos apics.org, freepik.com