Many retailers have taken a kind of patch-up and make-do approach to creating an omnichannel supply chain. In some cases this works, but it becomes more tenuous as online sales grow and cross-channel shopping becomes more complex. All retailers will eventually need to bite the bullet, but the cost and short-term disruption are very real barriers.

End-to-end visibility may not be the Holy Grail of omnichannel execution, but it is a major part of it. I find it mind-boggling that in 2019 we are still discussing whether or not this is an important part of a company’s execution.

I don’t think it is a cost/benefit or ROI justification that is holding up the needed integrations. I think it is attempting to integrate with legacy systems that did not deliver on their promise. Brands have used manual work and spreadsheets to work around the flaws of these legacy systems. Now no one wants to go back and scrap everything to do it correctly.

It has been proven time and time again that an efficient and visible supply chain improves sales and profits across all selling channels. It is time to move into the 21st century.

The whole article describes what sounds to me like just plain lazy thinking on the part of many retailers. Forty-five percent say it’s only “somewhat critical” and 23 percent say “not very critical.”
Sixty-eight percent are basically shrugging their shoulders. And we wonder why brick-and-mortar stores are going bankrupt? Maybe digitally-native brands had the benefit of starting with a clean sheet of paper and no legacy systems baggage. I’m sure integration is expensive, but they could at least say “critical” which would put it at the top of the list of survival mechanisms that need to be figured out.

Aging supply chain infrastructure has become the technical debt that retailers are challenged with, as they move to more omnichannel like execution strategies. Traditional retailers are challenged not only systemically to become more agile, flexible, and connected, but also have to deal with the cultural implications as well.

One side of the IT focus is on maintaining the aging infrastructure and keeping the ship running with zero downtime. The other side of the IT team has to be absolutely locked in on driving innovation, with the right technologies to support inventory visibility across channels. In order for that to happen, it has to be driven from the C-suite, as its even more of culture and organizational change vs. installing the latest technologies.

Industry has already proven end-to-end inventory visibility pays out. The computer manufacturer knows exactly where their smallest component is in the supply chain, what country, on what boat, and when it will arrive. The auto maker, the aircraft manufacturer — they all know. And they would not do it if there wasn’t an ROI.

So what is holding back this progress in retail? Culture and attitude. Penny-wise and pound foolish. And maybe most of all, not really understanding what their business is all about.

Starting in the last recession we noted an increase in what we called “stuffing.” The shopper in a big box store puts something in their cart, moves to a different section finds something they like better and takes an item out of their cart and discards it in a “foreign” section. Store managers struggling to control labor costs can only clean up messy stores periodically. Thus an item is not sold, inventory shows it’s on the floor — it’s just in the wrong place. We are looking for a better union of store, shelf, and package.

End-to-end inventory visibility is the Holy Grail for omnichannel, especially for BOPIS. Consumers are more demanding in their interest in buying from anywhere and delivering to everywhere. This makes having a flexible supply chain very important and inventory visibility and accuracy are the key elements. The only technical way to have this information available to all of the key players in the supply chain is using the cloud.

Cost and its ROI are the problems the retailers and their suppliers face. Access to cloud-based skills and the difficulty of blending in the data from legacy systems are big challenges. Some retailers and suppliers will find these efforts to be burdensome, but they need to look at the long-term benefits and find a ROI. This is the picture of the future in retail supply chains.

Inventory visibility is a prerequisite for delivering and meeting shopper expectations in the omnichannel shopping and purchasing world in which we now live. It seems as though half of the RetailWire topics that have been posted over the years all lead back to inventory visibility.

One-hundred percent accurate up-to-the-minute inventory visibility in-store, in fulfillment centers and in the supply chain remains a vision for virtually all retailers (even having perpetual inventory at all for some would be news). Unlike say airline reservation systems which are up-to-the-minute complete and accurate, retail systems were never designed to support this goal. Yes retailers have traditionally under-spent on technology, but a real-time end-to-end inventory tracking solution is no easy feat either. For product that has enough value RFID seems like the only realistic, short term way out of this conundrum. There is a consideration to be made for available technology that is “good enough” to promise value and engineering the solutions accordingly to get close enough.

When retailers don’t have supply chain visibility, it can result in understocks and overstocks, poor inventory forecasting (stocking up on stuff customers don’t want), and increased shrinkage.

Inventory management systems that do everything on one platform can reduce the difficulties that come with running and scaling a retail business. They can also give retailers total supply chain visibility that can be accessed remotely, so they don’t have to be in a specific location to run their business.

Yet a lot of retailers overestimate how much inventory management systems cost, and how much they can help them save. As Tom points out, comprehensive inventory management systems are becoming the new normal, so it’s time for retailers to stop dragging their feet.

Every retailer knows the answer to this question! Smoke-screen conversations and push backs are telling insights to what the future will look like for certain retailers. Stock analysts should take note. Seamless integration and flawless customer experience are touted as the Holy Grail of retail. Oh yeah, sorry customers, it is above our technical ability to let you know if a product is in stock. Sorry employees, it is too costly to digitize old legacy systems — spreadsheets work! Claiming fear of failure to implement and pay for a digitized supply chain is lack of leadership on display. Retailers, many famous, die in the hearts and minds of leadership years before the physical outcome of the “going out of business” sale.

The ROI hasn’t been demonstrated to enough retail leaders to drive mass adoption of the latest supply chain technologies. As an example, I still believe blockchain will eventually prove to be for business what the internet has been for communication. However, the vast majority of retail leaders couldn’t talk their way out of a 30-second blockchain conversation if their lives depended on it.

All that says to me is that non-IT retail management can no longer be hands-off with their IT capabilities. The business leaders need to learn the basics of what is possible today to manage inventory.

One of the main issues here may be the word digitization! Do the retailers know what they are talking about when they talk about digitization? If they do, then this is not what is generally being said in the retail industry. Supply chain improvement and efficiency is still seen as the largest single benefit and ROI generator in their business. Improved customer service levels, reduced inventory and increased sales are all vital to the survival of retailers. If they are quoting costs as the biggest hurdle then they are not understanding the equation. To be able to make the most out of the supply chain, and let’s face it, very large retailers talk about competitive edge through their supply chain, you need end-to-end visibility. This is not rocket science. The capability has been around for a long time. I can only believe that they do not understand the term digitization as the industry has moved on from asking if end-to-end visibility is necessary and if nearly 50% do not see this as a good investment… Read more »

The key terms missing from this discussion are “store-level” and “real-time.” Warehouse inventory visibility is meaningless to the shopper who encounters a void at the shelf. It does next to nothing for the online or mobile shopper who has no reliable way of knowing that a desired item is in stock for a store-delivered or click-and-carry purchase.

Since stores are not located in the cloud, there is a compelling need to focus monitoring and measurement activities in the physical world. Sure, that data will be accrued in digital form, but that’s kind of a tautology, isn’t it?

My point is that you can’t have end-to-end inventory visibility when you ignore one end of the chain. Real-time, store-level perpetual inventory visibility is not a nice-to-do. It’s a life and death requirement for any retailer that plans to survive into the next decade.

End-to-end enterprise inventory visibility is now a retail imperative to offer consumers the omnichannel services they expect, such as BOPIS. Without accurate real-time inventory visibility across the chain, retailers need to rely on safety stock to offer omnichannel shopping services. Retailers that can’t sell an item in the store to online shoppers unless they have a safety stock of two or more of the item in stock according to the retailers “best records” of in-store inventory. Safety stock is an expensive, often hidden, cost for retailers.

According to BRP’s research, costs and lack of internal resources are the primary inhibitors to taking action on these initiatives, which aligns with the “Gravity Supply Chain Solutions” study.

One word: “silos.” In every conversation I have with a retailer on this topic, the common theme that is always behind problems with understanding inventory. Anecdotally we are seeing examples of inventory increasing as retailers sell and fulfil across more channels — the inability to move inventory between channels is pushing inventory upwards — but lack of understanding of what inventory exists is the first barrier to tackle before you can contemplate any movement. Anyone who has ever studied manufacturing and the theory of constraints will be familiar with the analogy of the “Sea of Inventory” where water level is equated to inventory and as it is reduced rocks — which are analogous to manufacturing issues — are exposed. Never has this analogy been more appropriate in retail than today. I don’t see it as “the holy grail” it is a starting point. More than that it an essential starting point. “You cannot manage what you cannot measure” — it is THE key asset in omni-channel execution therefore has to be understood. Aside from investment… Read more »