The goal of inventory management is to ensure that the right product is available in the right location at the right time for the right consumer and to maximize the return on inventory investment for the retailer. Sounds simple, but retailers have been focused on improving inventory management processes and systems since nearly the beginning of commerce. Global markets, multiple manufacturing sources, and diverse consumer channels and shopping platforms have created a modern-day complex and challenging inventory matrix. Couple all of this with geo/political/environmental disruptions and planners and forecasters are tossing their “magic 8-balls” out the window.
Legacy inventory management applications run on premise on servers maintained by the retailer and require in house expertise and time-consuming updates and changes. They are slow and less integrated than today’s businesses demand. That is the primary reason retailers are moving their applications to the cloud. New cloud-based software/technology provides the ability to not just place the right product in the right place at the right time to the right people, it allows for retailers to improve accuracy, visibility and speed to proactively manage an integrated supply chain from source to store. Despite the benefits of cloud-based inventory management systems, the vast majority of retailers, according to Columbus Consulting, have yet to convert, with estimates as low at 20% for those who have made the move. But why the hesitancy?
For one, it is a big change. Moving from on premise servers to a cloud platform requires a new skill set, talent enhancement and employee training, which could be quite disruptive to a “business as usual” work mode.
The second key reason for the hesitancy is that legacy applications have taken hold within companies, their processes and entire operating model.
The third, and perhaps most prominent reason for retailers not embracing the cloud is the issue of security. Retailers, like any business, are concerned about data being transmitted outside of their organization. They believe that the cloud is more vulnerable than their internal systems.
Regardless of their reasons, however, retailers should be considering a more immediate move to the cloud. If the recent supply chain crisis did not elevate the voids in legacy systems, the rise in inflation and on-going complexities of a unified business model should.
The benefits of a cloud-based inventory system are plentiful and include:
- Cloud software does not have to be customized for individual retailers
- Cloud technology is more responsive to change and creates greater synergy between various other systems
- Cloud applications save money and time by removing individualized modification costs
- Cloud platforms provide seamless and timely software updates, quarterly updates are the norm vs the standard 6-12 months legacy timing
- Cloud software leverages best in class learnings across the entire client base, no need to trial and error alone
- Cloud platforms and software can also provide better, more accurate forecasting by leveraging AI/ML to predict needs vs react to historical events
- Cloud technology is also better enabled to integrate and aggregate multi-channel selling needs and omni-fulfillment services (like BOPIS)
- Cloud systems are better at forecasting consumer demand for both stores and ecommerce businesses, providing visibility to inventory needs over distribution center activity
- Cloud software can create exception alerts in advance of supply chain issues to proactively address inventory bottlenecks and delays
- Cloud applications can also help with both store and DC labor planning based on anticipated receiving dates and can reduce visibility into flow from the week to the day level for labor planning
Still not convinced that evolving to modern inventory planning/cloud-based retail systems should be among your top 2023 initiatives? Perhaps it is too time consuming to source the right software/systems provider. Perhaps you lack internal talent to guide and manage the process. Perhaps you simply don’t know how to start and scale new processes and practices.
Whatever the reason, Columbus Consulting can help.
For over 20 years Columbus Consulting has been partnering with retailers to solve their challenges and drive their businesses forward. Our marketplace of senior level retail practitioners won’t just tell you what to do, they will become an extension of your team, evaluating, sourcing and implementing systems that work. We know we can help, because we have been helping our clients, over 300 global leading brands, successfully and have a 96% re-engagement record.
We offer top talent who have held similar roles in the industry and can hit the ground running. Professionals like Stuart Tattum. Stuart is a highly motivated professional with a unique combination of outstanding business and information technology skills specializing in the retail industry. He has demonstrated a track record of delivering reliable, high-quality, bottom-line-oriented results. Stuart’s experience includes significant business process and systems projects at domestic and international retailers and sophisticated project management including software development. With over 25yrs industry-related experience, Stuart has worked for and with such brands as J. Crew, DSW, Five Below and Walmart. He has overseen the sourcing and implementation of many inventory management systems and transformed major global brands from legacy systems to cloud platforms, working with various software providers and applications.
Stuart and the CCI team can work alongside your teams to validate your company’s cloud-readiness, identify software providers, understand your current business processes and requirements and champion change management and training for successful implementations.
There are more where Stuart came from…Columbus Consulting has over 150 practicing consultants at your disposal to address your retail, CPG, grocery challenges across business disciplines like: unified commerce, supply chain, IT, organizational structure, merchandise, planning and allocation, inventory management, data & analysis, finance and strategy.
Find out how we can help you. Contact us: https://www.columbusconsulting.com/contact-us/
Also, Stuart is open to networking; connect with him directly at: stattum@columbusconsulting.com
