Customer expectations are a moving target that companies must continuously track and anticipate. A Hubspot survey of customer service representatives recently revealed that 88 percent of respondents believe customers have higher expectations now than in previous years. And if you aren’t factoring your supply chain cycle into your analysis, you run the risk of losing out big in the future.
Reliability and speed of product delivery are consistently ranked as pivotal points of customer satisfaction, which isn’t surprising given the fast-paced nature of our transactional world. In this context, think of a busy family whose convenience and daily routine hinge on the delivery of a new appliance, or a project manager constructing a building with a firm completion date. Since most purchases are now shipped and delivered, rather than made and bought in stores, delays are not just inconvenient; they’re potentially catastrophic.
To compete, survive and thrive, businesses must exceed expectations on time, every time. While many elements play into this dynamic, none is quite as foundational as the management of a company’s physical inventory. The efficient co-use of meticulous inventory control and ERP can elevate a company’s reputation, foster trust in clientele and drive brand loyalty. Harnessing the power of robust inventory control through an ERP system ensures that promises made are promises kept.
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Navigating the nuances of control versus management
It’s crucial to differentiate between “inventory control” and “inventory management”. While often used interchangeably, the former focuses on maintaining correct on-hand inventory levels through the processes of ordering, storing and using a company’s inventory. The latter encompasses the broader strategic activities surrounding sourcing, accurate forecasting and effective warehousing techniques. Without precise control, management can become a chaotic and costly affair, leading to stockouts from orders surpassing available products, overstock and, eventually, dead stock – where overstocked merchandise becomes obsolete or unusable and can never be sold. These kinds of challenges are harbingers of greater organizational difficulties and are often followed by subsequent loss of consumer confidence.
Nearly 60 percent of retailers and direct-to-consumer brands struggle with inventory accuracy levels below 80 percent, typically driven by outdated data from POS and ERP systems, fragmented inventory views and difficulties integrating legacy systems. Consequently, companies that do prioritize inventory control to ensure proper management, rather than resigning themselves to the prevailing norm, stand out as exceptional performers in the marketplace.
When it comes to achieving that distinction – along with the task of reducing costs to maintain a competitive edge and drive sustained profitability – the implementation of ERP systems is an ideal starting point. Aside from its organizational capabilities, ERP offers a means to safeguard a company’s most valuable assets, notably its inventory. For some companies, such as those in the general retail sector, inventory can represent over a 70 percent share of current assets. As a significant investment component that consumes companies’ working capital, inventory must be carefully managed through the implementation of an effective strategy.
ERP provides businesses with a powerful inventory-management tool that streamlines real-time data, actionable insights and automation in one cohesive platform. It prevents inventory mishaps while consolidating operations, accounting and other administrative duties to ultimately optimize the entire supply-chain process. ERP offers businesses peace of mind and assurance that products are where they need to be when they need to be there.
Accuracy, accessibility and security of data are crucial to customers
The accuracy and accessibility of a company’s data are directly proportional to the accuracy of its inventory management. Any discrepancies in data and barriers to sharing can lead to misinformed decision-making by distributors, which can ripple through the operation, causing confusion, frustration and further disruptions in the supply chain. Beyond accuracy, security and reliability of data are paramount, protecting a company’s vital information against threats and ensuring continuity in operations.
In fact, research into data quality and usage by companies found that 69 percent of businesses said it improved their strategic decisions; 54 percent said it boosted control of operational processes; and 52 percent said data helped them understand customers better. A holistic ERP solution centralizes that data, ensures its integrity and empowers companies with predictive analytics and machine learning tools to make smarter inventory decisions that are truly reflective of market demands.
But ultimately, a business’ inventory strategy is only as good as the information it’s based on – and that information is only useful if it’s safe and available through a variety of convenient channels, including mobile access. Specifically, a recent market data report revealed that 65 percent of sales representatives who have adopted mobile platforms for accessing data achieve their sales quotas. By using an ERP with mobile connectivity to guarantee the reliability of their data streams, businesses can craft inventory-control mechanisms that are agile, adaptive and responsive to market and consumer needs.
The companies that strive to deliver accessible and accurate data also prioritize safeguarding the data that fuels their businesses – and most use the best resources they have access to. However, security can vary significantly depending on whether inventory management is done manually or via ERP software. ERP provides enhanced security options through on-premises systems and cloud-based SaaS platforms to efficiently manage inventory data while manual security tactics, for example, may include a login-required desktop spreadsheet or storing paper ledgers in a locked cabinet.
Protecting sensitive information is no longer optional, nor is it strictly about safeguarding business inventory. In the retail sector, where 25 percent of data breaches involve theft of payment and personal data, consumers must be protected alongside inventory. Taking every measure to prevent unauthorized access, data theft and corruption is an ethically sound approach backed by integrity and responsibility.
Inventory impacts brands in the eyes of the consumer
In the global marketplace, where consumers are quick to both praise and criticize, the stakes of inventory success have never been higher. Inventory-control strategies directly influence a brand’s ability to meet customer needs, make promises and uphold standards. Satisfied, loyal customers are the lifeblood of business and a comprehensive inventory control system can foster this loyalty. Building trust with consumers through reliable inventory forecasting, impeccable inbound and outbound logistics and the timely delivery of products is instrumental to building and sustaining a successful business model.
In addition to an expanding base of happy customers, companies almost certainly will experience the financial benefits of efficient inventory control. Eliminating stock-outs, reducing excess inventory and streamlining operational processes contribute to a healthier bottom line. Reputation is hard-won but easily lost and a single inventory gaffe can tarnish even the most prestigious brands. Building resilient and reliable inventory control structures enables businesses to protect their most valuable asset – their reputation – from marketplace volatility.
