Retail Design & Technology Magazine and Nick Martindale looks at the juggling act of meeting retail customer demand versus stockpiling.
Stock-ordering systems, in theory, should enable them to keep on top of this but a recent survey by Wasp Barcode Technologies found some 64 per cent of retailers were not happy with their current means of managing stock control.
Stock ordering systems, whether as part of wider ERP packages or standalone systems, have become considerably more sophisticated in recent years, says Maria José Gonçalves, director for the retail market at WeDo Technologies. ‘These now include features such as sales forecasting, weather conditions and even social network inputs,’ she says. ‘This gives a much broader view of the different elements that impact stock handling and enables retailers to be better prepared.’
For smaller retailers that still rely on manual stock processes, the advent of a barcode scanning system which links into stock control or inventory management systems can make a big difference, suggests Hugh Furness, European sales director at Wasp. ‘Any company moving over to barcode scanning and stock control or inventory management will see a great improvement, with no stock-outs and accurate records,’ he says. ‘As staff will only be scanning stock in and out using a barcode scanner, there won’t be any human errors and the stock should be correct at all times.’
Technology can also help retailers get round the perennial problem of having items out of stock on the shelves but available in the backroom. ‘Retailers should either monitor EPoS sales in real-time or near real-time, comparing sales against trends,’ says Gonçalves. ‘For example, with a food retailer if there are no milk sales in the period between 9 am and 10am, there is a high probability that the milk is not on the shelf. Business assurance systems can help here by performing this type of analysis and then sending alerts to store staff.’
Larger retailers, though, will need to think about systems which tie into other business applications, such as forecasting, planning and supply chain modules to avoid scenarios where shelves are bare at key times of day.
‘Retailers should consider an approach that combines accurate forecasting of consumer demand and matches this with continual replenishment of inventory,’ says Sarah Taylor, senior director at Oracle Retail. ‘The technology exists to accurately predict consumer demand for goods, manage this with the supply chain and suppliers and ensure that products are received on time, lowering the risk of products being out of stock and improving efficiency. They should not be relying on just-in-time delivery to avoid bare shelves.
The issue for many retailers, though, is the specific demands of their own sector and the scale of their enterprise, as well as the obvious barrier of a lack of resources to invest in new technologies. ‘It’s less a case of systems development and more an issue of management understanding the need to organise operations on a different basis,’ says Julian Mosquera, technical director at LCP Consulting. ‘This approach requires analysis and segmentation of the product portfolio, with rules established as to how the different segments will be served into store.’ Options here could range from drip-feed daily replenishment, once-weekly bulk replenishment to full allocation to store at the start of an event with no further replenishment available, he suggests.
The huge acceleration in online shopping and increasingly mobile and social networking-led purchases also has implications for stock ordering. ‘Today’s key issues are how I order across all the channels in which I trade, and how do I balance between fulfilment online and store replenishment,’ says Tony Bryant, business development manager at K3 Retail.
‘With click-and-collect moving on at a pace, stores may move to a fulfilment model rather than a purely replenishment one. Today’s solutions should now give very sophisticated replenishment models with supporting algorithms to meet a significant changing demand profile at store location level. A minimal credible display on the shelf is required and stock should never fall below this level,’ he adds.
Solutions are also emerging to help smaller retailers in this space, suggests Furness, which can flag up when stock is at a minimum level and provide remote access to inventory systems so managers can email purchase orders direct to suppliers.
Ultimately, though, the arrival of genuine multi-channel retail means having staff keep track of stock is becoming increasingly anachronistic, says Taylor at Oracle. ‘The larger the organisation, the more difficult it is to maintain visibility to stock across multiple stores, distribution centres and ecommerce sites, unless you have systems in place to manage this centrally.
‘It is no longer appropriate to wait until the shelf is empty to reorder. Retailers should have a comprehensive view of inventory – from stores to the distribution centres and beyond – to automate and better manage orders, inventory, allocation and distribution.’
WeDo Technologies www.wedotechnologies.com
Oracle Retail www.oracel.com
LCP Consulting www.lcpconsulting.com
K3 Retail www.k3btg.com