The latest issue of Great Christmas Gazette is out and the gifts community is abuzz with the talks of holiday demand fluctuations, supply-side deviations, and snarling inefficiencies creeping from crevices of manual interventions.
The fulfillment teams are working overtime and gift shop shelves are teeming with new enticing and never-before-seen items. Suppliers are getting orders left, right, and center, and everything from warehouses to stores is in a festive frenzy.
However, Rudolph, the jolly retailer, found himself grappling with a mountain of inventory woes this year. With multiple stores and hundreds of suppliers, managing stock levels across different locations to cater to customer demand while ensuring optimal stocks is proving a difficult task. Without proper insight into the real-time inventory, demand patterns, market fluctuations, and supply-side operations, optimizing replenishment cycles became a nightmare.
While poring over dozens of sheets and purchase orders, Rudolph gets a visit from none other than Santa, who then describes how automation-driven retail and supply chain planning can rid Rudolph of all his woes.
Here are all the digs from the super engaging chat, straight from the North Pole!
1. AI-Based Demand Forecasting
The inability to anticipate demand accurately can significantly derail retail planning and supply-side operations and can result in multiple revenue-hurting scenarios. Common examples include overstocked shelves, stockouts, wastage, higher storage costs, capital lock-ins, mismatched assortment, and more.
Analyzing and predicting demand at granular levels, like stores, requires an in-depth understanding of the interplay of tens of different factors that vary from external to internal, customer preferences, seasonality, demand patterns, and so on. Traditional demand planning and forecasting systems crumble in such a scenario, leaving retailers with inaccurate forecasts, disgruntled customers, and thinning bottom lines.
AI-powered demand forecasting solutions, on the other hand, can analyze data from various sources, such as weather data, historical sales data, and social media trends, to provide retailers with accurate forecasts. This helps retailers order the right products in the right quantities and avoid stockouts or overstocking.
2. Optimizing Inventory Replenishment
Inventory replenishment is built on top of demand forecasting and any errors in demand forecasting get snowballed in the replenishment phase. Further, optimal replenishment helps retailers reduce inventory costs, and wastage, cater to customer demand without overstocking, and improve shelf availability in a precise manner.
Achieving this manually or with the help of legacy inventory management systems doesn’t yield the required levels of accuracy across the entire value chain. Bias error, and no capability to measure and plan for demand shifts and lifts during promotions, the effect of seasonality, demand fluctuations, etc., are the major reasons for the same.
This is why retailers need to opt for inventory optimization instead of regular planning and management processes. AI/ML-driven inventory optimization enables retailers to allocate the right inventory with hyperlocal accuracy while incorporating multiple constraints and sales influencers. Retailers can adjust for any supply-side deviations such as lead time fluctuations, delays, fill rates, and more to ensure high shelf availability.
3. Integrating Retail Planning Functions
One of the most challenging aspects of retail planning is the siloed nature of tasks. Critical functions like demand forecasting, sales predictions, and inventory planning can steer the overall efficiency of retail operations wayward. The inability to analyze and model the effects of sales and demand patterns on inventory replenishment via an integrated interface makes it difficult to have a single source of truth.
The major reasons behind disparate functioning are legacy systems and lack of supporting technological infrastructure, which is often viewed as an additional business cost.
Investing in an integrated retail planning solution that offers a centralized operations management dashboard and combines both demand planning and inventory replenishment functions can do wonders in this regard. Retailers can model variations, get actionable insights related to all the functions in one place, and always have a single bird’s eye view of every function with the ability to go as granular as they want.
4. Merchandising Analytics
Another powerful tool that enables retailers to position inventory and plan assortments strategically is merchandising analytics. How the demand for specific items is looking like, are there any seasonal variations that are going to affect the demand in a particular category, and what items are vulnerable to wastage or overstocking – intelligent analytics capabilities have answers to all these and many such questions.
Now, investing in a standalone predictive analytics solution is only going to add another management interface with siloed data in the retail ecosystem.
So, we recommend opting for an integrated solution with comprehensive analytics capabilities. As the merchandise analytics capabilities are built-in and integrated with demand and inventory functions, retailers can take well-informed decisions and draw actionable insights from advanced data visualization.
5. Automating Supplier Collaboration
Efficient and mutually fulfilling retailer-supplier collaboration is the foundation of successful retail operations. Retailer and supplier interactions, documentation, onboarding, product information, and finance management are all critical for fostering true supplier collaboration.
However, the majority of suppliers use third-party operations management interfaces, which means additional work for retailers and more redundancies in terms of individual tracking, processing, and more.
This is where automation-driven supplier collaboration frameworks come into the picture. Armed with built-in and customizable automated workflows for supplier onboarding, new product introductions, product cataloging, documentation, supplier/retailer data interchange, invoice and PO management, etc., these frameworks can transform retail supply chain management via truly seamless and effortless collaboration.
Automating retail and supply chain planning comes with amazing benefits. However, having the right approach, figuring out the right use cases, and incorporating a scalable, robust, and flexible technology suite is a dire necessity for successful endeavors.
So, while Rudolph benefits from these secret tips from dear Santa, why not take action and get started for an amazing holiday retail adventure this year?
