Traditional inventory management falls short

Traditional inventory management systems are designed for organizational “handoffs,” rather than end-to-end coherence.  For example, a marketer’s goal might be focusing downstream on the consumer and generating demand, while an operational person might look upstream to the ERP and other systems to optimize the location of inventory for fastest and cheapest shipping.

Traditional inventory management systems are also not built for dispersed digital shelves that combine branded experiences and transactions. For example, enterprise resource planning systems (ERPs) are typically geared toward tracking shipments of pallets vs. “eaches” (individual items)  on predictable schedules and focused on volume plays rather than niche and longtail opportunities.  This makes it difficult to accommodate hybrid wholesale and direct-to-consumer brands that need to update unit-level changes in inventory in real-time and across selling points.  

Many brands have dealt with these new requirements by duct taping systems and processes together. For example, they may introduce an electronic data interchange (EDI) provider to handle drop-ship communications, a marketplace integration platform to handle connections with top marketplaces, spreadsheet exports to communicate inventory to long-tail retailers and to sales teams, an ecommerce platform for their brand site, and third-party logistics (3PLs) and other warehouse management systems to support fulfillment. Some brands introduce a separate inventory management system just for direct-to-consumer inventory.  

With each system managing a small piece of the puzzle, there is no single view of changes and digital shelf signals. Ideally, brands would use one platform to drive accuracy and manage stock. That includes both volume-driving occasions (such as Kroger, Publix and Grainger), as well as more personalized, shareable moments and experiences on newer destinations that are slowly rising towards the “top of the funnel” and driving consumer insights and new sources of revenue (think goPuff and UberEats). Brands should also be able to generate prioritized actions across all these touchpoints and test new routes to market. Due to inadequacy of existing solutions, execution remains a challenge.