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How To Streamline Your Retail Supply Chain

Manager in warehouse

If you’re constantly telling frustrated customers that the item they want is out of stock — and you don’t know when to expect more — that’s a sign that all is not well in your retail supply chain. On one hand, running out of stock hurts customer satisfaction, but on the other hand, overstocking isn’t cost effective. Many mid-level retailers struggle with the tradeoffs of maintaining just the right amount of stock and the complex data that goes into managing replenishment levels

For an example of this complexity, let’s say that you have 10 clothing stores. Your most popular shirt comes in six different sizes and six different colors — that’s 36 different items to manage. You could set up a really broad replenishment plan with your vendor, such as “I just want five of each color and size in my store at a given time.” But if you know that the black shirts sell more than pink shirts, and you sell more mediums than extra smalls, stocking them the same way makes little sense. Of course, making your replenishment orders more granular comes with a tradeoff in complexity. If you stock them all the same, that’s one piece of data; if you stock them all differently, that’s 36 different pieces of data.

Now, remember that you have 10 stores. Do the stores all need the same levels of stock for those 36 items, or do they need different levels? They’re probably going to require different amounts. So now you have 10 stores, multiplied by 36 different pieces of data — an increasingly complex set of data just to sell one shirt style.

If your ERP software requires you to manually set each of these stock levels for each store, size and color, that’s asking for trouble in your retail supply chain. Not having all your replenishment rules in place, or having overly complicated replenishment rules, is going lead to inefficiencies and errors.

The solution to strengthening your retail supply chain management isn’t simply to choose a new ERP solution that promises the functions you need. When you implement the software and actually try to use it, you may find that the ERP’s process for handling a function requires too much data entry to be helpful. The software features aren’t necessarily the problem here — it’s the amount of data you need to enter that causes inefficiency.

It’s always important to focus on streamlining and automating the business process instead of just looking for software features. Start with what you have as an input and what you want as an output, and then look for the most efficient ways to get from one point to the other. 

Look for ERP systems that facilitate automation with your vendors. This kind of integration with your vendors allows for real-time alerts when an item is likely to be understocked or overstocked. Such notifications support better planning and decision- making, which leads to greater customer satisfaction.

In streamlining your retail supply chain, the key is to start with analyzing your processes. Then, use technology as a tool to improve them in meaningful ways, rather than adopting a piece of technology that offers only a surface solution and trying to make it work for you. 

Learn how to better anticipate customer demand by starting your free no-obligation demo of ArcherPoint’s retail management solution.

Author: Wm. Matthew Street, Solutions Consultant/Retail Product Lead at ArcherPoint