The Potency of Inventory Management in Navigating a Business
The COVID-19 Pandemic changed the trajectory of society, let alone the world as a whole. Now there is a shift in the way people approach things – perhaps with more caution and a fresh perspective that anything could happen, good or bad, at any given time. Many industries and businesses have had to adapt to a new norm of preparing for the worst, as the pandemic did a huge number on a large percentage of them.
In times of crisis like such, retailers are faced with drastic changes in consumer behaviour, forced to acknowledge the inefficiencies in their supply chain and rethink many aspects of their long-established business practices – especially in how they manage their inventory.
The Importance of Inventory Management
Not many businesses realise just how crucial it is to have an efficient inventory management system. The flow of your stock is directly correlated to your company’s bottom line, so every potential issue that arises at the back end of your business will surface and affect your company’s revenue. Inventory management involves tracking quantities, locations and statuses of goods in a retailer’s inventory, as well as estimating demand so that a retailer can ensure that their products are always readily available for their customers. Internal fraudulent purchasing can also be detected through inventory management software as it can pinpoint every transaction made to suppliers and can display outliers or extreme values in a dataset.
Data and Stock-Keeping Efficiency During a Pandemic
Innergia Labs’ CEO, Vernon Chua, said “On an average day, carrying a little bit of dead stock may not have much impact on your business, but when times get difficult, stock-keeping efficiency determines whether your business will survive or not”.
Every retailer seeks to avoid carrying dead goods because it can eat into their profits, and truthfully, it can also adversely impact businesses during a crisis because it can weigh heavily on their cash flow and limit their ability to navigate the current economic climate. With unsystematic inventory management, your costs will inevitably increase due to overstocking and having to retain leftover goods in storage. Moreover, it will decrease the space availability for new inventory to be stored and may require extra time and effort to create more room for all the stock to be accommodated.
This is where data steps into the picture. It is possible to dodge these easily avoidable problems by systemising your inventory with data analytics. In gaining access to real-time data, retailers can identify and create an accurate forecast of what kind of products their customers seek, and determine reasonable price points for them. This would allow your business to brainstorm unique product developments, and later gauge when to order the stock and how much of it they should hold at a time. An optimised inventory management system will also prevent the case of your products “selling out”. Many would think that their products being sold out is a positive performance indicator of their business, but really, selling out just hinders you from generating more revenue as it forces your customers to seek an alternative product which may make you lose customer loyalty.
Filling the gap in data collection and inventory management system
Data analytics tools are extremely useful in managing all aspects of a business, however, they can be quite costly to acquire – hence why SYCARDA was developed in the first place. We wanted to cater a more affordable product to SMEs that may not have the allowance to spend on costly software. Moreover, with respect to the prominence of an efficient inventory management system within a business, SYCARDA introduced a platform within the software, PUPA, to systematically handle inventory.
Learn more about your data and manage your inventory with SYCARDA, a data analytics and business intelligence platform.
