In retail operation lingo, store or inventory replenishment of often overshadowed by higher profile measures such as merchandising, marketing and branding. This is strange because the efficacy and success of a business’s store replenishment operation will always have a huge impact on breaking even and profitability. In simple words, the effectiveness and accuracy of store ordering affects sales through shelf availability. Your best bet is to therefore keep track on your stock. That is where retail stock optimization comes into the picture. It impacts handling storage and even waste costs. It is a vital part of the supply chain.
Small and medium retail outlets often have hundreds of items compared to larger stores and hypermarkets which often have tends of thousands of items. Strangely, hypermarkets and big stores often have an easy time managing their inventory. They invest in inventory and stock management systems that make it easy for them to monitor the supply chain. They simply understand the importance of accurate, item level control which is impossible to achieve with traditional manual store management.
There are lots of gains beyond monetary gains that come along with optimizing the store replenishment process. The gains range from saving time to reducing workload. It is important to note that many of these gains can be realized easily and relatively quickly. There are sacrifices you have to make though. You have to invest in a reliable service provider. Only then can you be sure of accurate and timely inventory management, optimized demand forecasting and scheduled order cycles. With a reliable system, you can be certain that these processes will be systematic and accurate. You can then focus on automation of other routine areas of stock replenishment so as to give your team the time and energy they need to focus their expertise on other areas that call for closer human attention.
Companies experience drastic changes one or two months after optimizing their store replenishment processes. This is not a coincidence. A close look at such companies reveal that companies that benefit the most are companies where significant capital that could better be used somewhere else is tied up in excess inventory. Companies where shelf availability levels are critically and unacceptably low resulting in lost customers and sales also tend to benefit shortly after incorporating retail stock optimization. The bottom line here is how you may sometimes take longer than usual to break even when all you need as a merchant is to invest in a system that will make it easy for you to monitor the stock process.
The Bottom Line
Always be keen throughout the stock replenishing process. Shelf availability levels should always be measured and the data captured in your inventory management system. Then make sure that replenishment ordering is always decentralized. Where possible leave the process to local managers. Remember you are trying to ease business operations. Remember too that when thousands of different products have to be managed, manual ordering becomes a labor intensive and costly. Your saving grace is a reliable inventory management system that can capture data to make stock optimization timely and easy.