truggling with inventory visibility? You’re not alone. While the root cause may differ, businesses large and small face this same challenge every day. Yet your ability to guarantee fulfillment of customer orders will determine your success. It’s essential for growth, and survival, in competitive markets.
Let’s look at four causes of inventory inaccuracy and some approaches to solving them.
You’ve grown. What started as a manageable level of inventory, and a team that knew the location of every item, fell apart. Business has picked up. Orders come in faster. Your workers are drowning in a sea of printed pick sheets. The receiving dock overflows. There’s little time to train new hires, and location discipline falls apart. Getting orders out the door is your only objective. Every day is a scramble.
HOW TO SOLVE IT
The key is to start with a Warehouse Management System (WMS). Something flexible, that can be rolled out quickly, and in phases. The first phase may even mimic your paper based processes so you can rollout automated processes over time. This lets you minimize business disruption as you incrementally improve operations. And because today’s systems can be used to run multiple warehouses, you’ll be prepared for future expansion.
Expansion is exciting. New sites let you serve new customers. Or provide better service to existing ones. But unless all the systems used to
manage each location are connected in real-time (or close to), you’ll never really know how much inventory you have on hand. This means each site carries its own safety stock. The result? Increased inventory carrying costs.
HOW TO SOLVE IT
Connect your locations. It doesn’t matter if they’re warehouses, store fronts, or 3PLs. By linking all the different systems (like WMSs and Point of Sale systems (POSs)) used to manage inventory at each location, you’ll have a single view of inventory. What’s the best way do it? Use an Order Management System (OMS), possibly with a little help from an Enterprise Service Bus (ESB). The OMS acts as your inventory master, and provides a consolidated view of what you have Available to Promise (ATP) or Available to Sell (ATS) across your entire distribution network. As an added benefit, using an OMS can help reconcile your sales channels too…
There are many ways to capture orders. Field sales, EDI, fax, email, customer service reps, and eCommerce. But if they’re not connected, it’s difficult to know who sold what, and how much inventory is left. Like the multi-location challenge, if you have multiple sales channels that are out of sync, it ties up cash. How? By requiring additional safety stock to reduce the risk of customer disappointment because one channel sold inventory promised by another. But more than that, disparate sales channels mean your customer doesn’t have a real-time view of all their orders, which results in a frustrating customer experience.
HOW TO SOLVE IT
This is where an OMS shines. If you connect all your sales channels either directly into the OMS or via an ESB, you’ll always have a clear picture of how much you’ve sold. It even provides an order entry/edit interface for your customer service reps. And by connecting that same OMS with your warehouses, you’ll be able to see how much inventory you have left. This clear picture of inventory lets you lower safety stock levels and reduce overall inventory carrying costs.
As organic growth slows, many mid to large enterprises rely on acquisitions for expansion. But mergers are hard. You need to combine people, culture, and business processes. Inventory systems as well. And how quickly you can achieve these synergies directly impacts your Return on Investment (ROI) on acquisitions. Many businesses struggle to integrate multiple ERP, CRM, and ecommerce systems. And many divisions are resistant. They want to preserve their service differentiators, and believe merged systems will be restrictive. Yet, a single view of inventory and customer order history across divisions is key to consolidating shared services and keeping customers loyal.
HOW TO SOLVE IT
Luckily, by using an OMS (once again, possibly assisted by an ESB), you can meet both goals. How? By speeding integration. New acquisitions only need to integrate with a single platform (OMS/ESB). The OMS then automatically routes centrally captured orders to the appropriate division, while those divisions continue to use their existing fulfillment processes and systems. No need to rip and replace. And no need to directly integrate ERPs. The OMS is the common
platform that provides a single view of both inventory and customer orders across your organization.
The benefits of achieving inventory visibility are enormous. And a necessary stepping stone to future growth. With global inventory visibility provided by a distributed Order Management System you can:
And most importantly, keep your customers happy!
To learn more about ways to achieve inventory visibility across your organization, please Contact Us.