by Gutsaga Technologies
The Evolution of Inventory Management
The landscape of inventory management in retail has transformed significantly over the years. Initially, inventory management was a manual process involving paper records and physical counts. This method was time-consuming, prone to errors, and inefficient. The advent of computerized inventory systems in the late 20th century marked a significant improvement, enabling more accurate tracking and easier data management.
In the 21st century, inventory management has continued to evolve with the integration of advanced technologies and enhanced the accuracy and efficiency of inventory tracking, allowing for real-time updates to inventory records, reducing the likelihood of discrepancies and improving the overall accuracy of inventory data.
As the retail industry faces increasing competition and changing consumer expectations, effective inventory management has become more crucial than ever before. Retail businesses need to ensure that they can meet customer demand promptly while minimizing costs associated with excess inventory and stockouts, which means just having the right products in the right place at the right time.
One of the basic measurements of good inventory management is inventory turnover, not the customer happiness. The turnover reflects the frequency of product being sold during a given period. A business does not want more inventory than sales. Low inventory turnover can lead to unsold stock, and losses. However, on the other hand, another important measure of good inventory management is the level of product availability. The higher it is, the higher the level of customer satisfaction. But a higher availability usually requires a higher stock, which generates additional costs. Therefore, the art of inventory management comes down to balancing between the level of supply of goods and the period of turnover of these goods. In other words, it means balancing between customer satisfaction and business profitability.
Fortunately, modern IT systems for inventory management can find this balance automatically, ensuring a smile on the face of both the customer and the seller. This requires leveraging advanced technologies and innovative practices.
Still most software inventory management systems replicate many traditional ERP solutions:
if you want better product availability, you need to order more of it; if you want to reduce turnover period, you lower your availability level. Traditional forecasting methods cause known problems: long turnover periods or low level of availability of goods, or failure to cope with the so-called “slow movers”, which consequently leads to generating losses, cashflow problems, and sometimes even bankruptcy.
That is why modern solutions created by experts who understand complex business and market problems have been replacing traditional ERP systems.
Transforming Retail Chain Inventory Management Systems
Many inventory managers in a retail chains, have witnessed firsthand the rapid evolution of inventory management systems. The landscape is ever-changing, driven by technological advancements, customer