Given the sizeable outlay of capital represented by grocery stores' stock and carrying costs, efficient inventory planning and optimization play a crucial role in the industry today.
In order to succeed, stores must effectively coordinate their various departments so that they can offer the best possible selection of goods to their customers. They can prevent supply chain issues like stockouts and surpluses by doing this. The use of a digital ERP system is crucial to achieving these results.
The four key areas for streamlining grocery inventory management for maximum efficiency will be covered in this article, along with how a digital ERP system can support this effort.
- Planning's Impact: A solid planning strategy is the foundation of a successful inventory management process. Digital enterprise resource planning (ERP) systems allow supermarkets to more accurately predict and project inventory levels across multiple product and location hierarchies, taking into account both historical data and current trends. They can use this information to organize product assortments, make purchase orders, and make restocking requests. Grocers can benefit from better inventory management and less time spent on planning thanks to a digital enterprise resource planning (ERP) system.
Targets based on inventory turnover or days/weeks of supply, for instance, give stores the opportunity to create granular product assortments. These aims are then weighed against clusters of locations that might include retail establishments, customer communities, or wholesale clientele. Once the assortment plan is complete, it will be used as the basis for future purchase orders and replenishment orders to guarantee timely stock replenishment. The retailer's unit receipt plan can be used by suppliers as a basis for planning production and distribution.
- The Key to Success Is Reliable Master Data. Your central database is the glue that holds everything together. When calculating inventory turnover and expected delivery dates, factors such as pack sizes, service levels, and fixture definitions from suppliers are crucial. In order to maximize the efficiency of inventory management, retailers need to pay close attention to these factors.
Maintaining reliable master data is crucial for the success of grocery stores, and this is where a fully integrated digital ERP system comes in. A digital ERP guarantees accurate and timely data by centralizing data management and allowing for real-time updates. This creates a unified data set from which everyone can draw accurate conclusions. By instantly reflecting any changes made to master data, real-time updates greatly reduce the possibility of inaccurate or out-of-date data being stored.
In addition, digital ERP integration with third-party platforms facilitates the automated transfer and verification of information. Grocery stores can improve their operational efficiency, customer service, and stock management with the help of these features.
- Allocation and visibility into inventory flow are critical for facilitating operations and reducing stock issues before they arise. For instance, when a purchase order comes in, the store can set aside a certain number of units to ship out to the storefronts. Businesses can define business rules for product allocation with the help of a powerful digital ERP solution based on fixture definitions, sales forecasts, and supply goals. As the scheduled delivery date draws near, suppliers can send an updated EDI ASN indicating the quantities to be shipped. Based on this data, retailers can make necessary changes to the reserved quotas. Sometimes, they can even use the EDI purchase order document to issue direct shipping instructions to retail outlets. With the help of EDI and the pre-allocation features of ERP, stores can keep their stock moving smoothly, cut down on their safety stock, and see their orders from start to finish.
- Methods for Distributing New Items to Retail Outlets Pre-allocation is a crucial first step in distributing newly introduced items to retail outlets. In such a case, a digital ERP can be used to cross-dock some of the order to stores for immediate pickup. Once the new product's sales per square foot velocity is established, the remaining stock can be stored in the distribution center until it is eventually distributed to retailers. Take the case of a new organic cereal that a supermarket chain rolls out. Because of the high demand for organic products in certain locations, the retailer uses its digital ERP system to ship a portion of the initial order directly to those locations. Cereals still available for purchase are stored at the warehouse. Depending on factors like sales volume, minimum and maximum quantities, shelf capacity, and desired weeks of supply targets, the retailer can distribute more cereal to other stores as demand rises.
Grocery stores can use a digital ERP to manage inventory efficiently, boost sales, and reduce stockouts and excess inventory situations by taking the shelf life of products into account in their replenishment algorithm and order proposals.
An additional tool for helping physical grocery retailers improve inventory velocity is the Demo Wizard In-Store Customer Engagement Marketplace, which allows vendors to invest strategically in promotional events hosted by individual store locations. The Marketplace combines the workflows of event management software with the sophisticated payment mechanisms of retail media platforms.
