Gain supply chain inventory visibility with better collaboration

by | May 30, 2017 | Omnichannel, Retailers, Suppliers

Complexity throughout the ecosystem

Retail inventory information needs have evolved considerably over the past few years. It used to be much simpler and easier to keep tabs of product moving from manufacturer, to the distributor, to the retailer’s warehouse, then the retailer’s store. Recent e-commerce trends have disrupted that of course, like everything else, so updating inventory information is more complex and complicated than ever.

Organizations are selling on a variety of channels, including in-store, online, social media channels, and more. When inventory is indicated for the item online, it may be the combination of inventories overall, inventories available in the fulfillment warehouse, or inventory at a specific store location. Basically, there are many places and ways inventory information could potentially be displayed (and could potentially be wrong).

Retailers are also fulfilling goods to customers through a variety of methods: buy online pickup in store (BOPIS), shipped directly to consumer (DTC), shipped to store, fulfilled by the warehouse, fulfilled by the supplier, fulfilled by the nearest store, and more. That further complicates inventory information and visibility. And much of what’s been listed above mostly applies to a retailers’ inventory visibility; that’s not taking into account the additional complexities of inventory data down the rest of the supply chain to vendors and manufacturers.

Ripple effects in the supply chain

Consumers like to see inventory information so that they know the item will be at the brick-and-mortar store they drive to, or know that their online order delivery won’t be delayed. Without sufficient inventory visibility, retailers may not know where the inventory is, when more will be needed or how long it will take for the shipments to arrive. Suppliers risk letting down both retailers and consumers when they make promises about the availability of items and can’t deliver.

The lack of end-to-end inventory visibility has created an internal drag on omnichannel execution and profitability.

When things are working perfectly, a consumer can go online, find a product they want to buy, a pair of headphones for example, and see that it’s available for in-store pickup at their local retailer. Two hours later they walk out satisfied with their new purchase. Or, they order the headphones online and they’re happy when that item shows up at their house two days later.

How do they know this? Inventory visibility. The supplier shared inventory access with their retailers, so anyone with a website or retail inventory system can see what kinds of products they have available, and how many they have left.

But, when the retailer doesn’t have complete inventory visibility, a retailer might show that they have three pairs of headphones left in the store, only to discover that they were all sold a few days ago and the sales weren’t recorded properly. Or, the customer might get a “we’re sorry, but we ran out” email a day after they place an order online, and they have to start their search all over.

Lost opportunities from data deficits

A lack of inventory visibility can ripple far beyond omnichannel execution and unsatisfied customers. Poor inventory visibility can lead to over-buying, slow moving or dying products, and can result in missing a run on fast-moving merchandise that will need to be quickly replenished. This combination can dump much needed cash flow into unwanted inventory, while simultaneously losing sales from stockouts.

One of this year’s priorities for businesses in the retail industry is better collaboration with trading partners, and inventory visibility is one of ways companies want to work better together. With all the moving parts of getting a product from the manufacturer, to the supplier, to the retailer, and then to the customer, it’s easy to understand why knowing where and how inventory is flowing ranks so highly. In today’s environment, inventory visibility is a necessity for delivering on consumer expectations and more businesses are working toward getting a bird’s eye view of their supply chain.

Is increased inventory visibility on your priority list this year?

SPS Commerce can help retailers, distributors, and manufacturers all participate in inventory visibility with their trading partners. With our inventory management solutions, you can share as much information as necessary to keep everyone happy. To learn more, start a conversation with a retail supply chain solution expert today.

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Get products in the hands of more consumers.

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Scott Bolduc


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