The Retailer Issue 65

BUSINESS OPERATIONS | INVENTORY MANAGEMENT

+ How do retailers keep enough inventory to satisfy immediate demand without stocking too much? Here are some examples: • Data and process: To remove inefficiencies a retailer can leverage process mining technology to evaluate where the delays or wasteful steps are so they can be eliminated or automated. Every time a human has to touch a system it can cause a delay or create errors. Applying process automation and orchestration ensures data flows happen in a timely manner. Some savvy retailers have learned to leverage technology to move to an event-driven order processing approach. This reduces the time it takes for orders take to move from the web- store through to allocation, pick, pack and ship from hours to a fewminutes. It also has a positive sustainability impact, as it increases the time to consolidate more orders together on the same outbound shipment – reducing transportation costs and emissions. • Analytics and AI: Leveraging highly advanced predictive analytics and AI can improve the quality of calculations made in terms of merchandising decisions (initial buy quantities, allocations, sales forecasts, howmuch product is held in inventory and where). This not only reduces customer disappointments and increases sales, but it also minimises product disposal costs (financial and environmental) and the need for additional shipments. For certain types of retail like luxury items, maximising the accuracy of these decisions is critical from a sustainability perspective, especially given the coverage last year of how products were thrown out in order to keep availability limited – and prices high.

• Internet of Things (IoT): If you cannot measure something you cannot manage it. Technologies leveraging IoT offer some new and interesting possibilities. Devices can be used to understand and control inventory across the supply chain – so you can deploy it to where it is needed by travelling the shortest distance, using the most sustainable route and transportation method. At a store or distribution centre, IoT can monitor and control energy consumption from freezers, and HVAC equipment (heating ventilation and air conditioning), thus saving money and delivering against a sustainability agenda. Being super-efficient enables sustainability. This in turn allows retailers the ability to differentiate themselves while cutting costs, which in today’s cutthroat market is nothing to sneeze at. With the right tools, retailers really can save money while saving the planet. 

Retailers can save money AND save the planet Consumers want a personalised experience, fast delivery and, in the meantime, do not want to damage the environment. But is this all possible?

BY OLIVER GUY [SOFTWARE AG]

differentiator with customers, employees, investors, suppliers and other stakeholders. But it also has an additional business benefit – having the focus on sustainability can actually drive down cost. Therefore, it creates an additional tangible reason to be super-efficient within the business. Often when an online customer order is delayed it is the result of a mistake, miscalculation, or very often a misalignment in terms of the flow of data. Ultimately this is inefficiency. Technology can play a major part in eliminating these mistakes and miscalculations – helping to create a flawless flow of data to avoid these issues.

etailers have a lot on their plates. The industry has been disrupted by the likes of Amazon and other online retailers and consumer expectations

Then there is the inventory conundrum; how do retailers keep enough inventory to satisfy immediate demand without stocking too much? In the case of grocers, this can mean throwing away food. Plus, expedited shipping can mean delivery vehicles are not optimised; delivering a half load instead of a full one causes more pollution and more wasteful packaging. So how does a retailer satisfy every customer’s whims while leaving a lower carbon footprint? SUPER-EFFICIENCY TO THE RESCUE Sustainability makes sound business sense. A focus on sustainability can be used as a

have soared – making it imperative that retailers offer what each customer wants, when they want it and where they want it. All of these challenges not only make it difficult for retailers to survive but can also detrimentally affect our environment. Convenience has a price; deliveries have soared as the click-to-buy culture expects instant gratification. Delivery vans, motorbikes and trucks dump tonnes of carbon emissions (including fine particulates that can trigger asthma attacks) into the environment while tangling traffic.

Software AG helps retailers digitally transform their businesses. With Software AG’s Digital Business Platform, retailers can connect systems, people and things in real-time in order to streamline, automate and provide intelligent visibility. Leveraging vendor agnostic integration technology, data silos can be eliminated to efficiently enable the omni-channel customer journeys demanded by today’s demanding consumer. For more information, visit SoftwareAG.com/Retail

12 RETAILER | MAY 2019

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