The Shelf Life Of Stuff: Inventory Management Goes Digital

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The yin and yang of central­ization and distribution

“It really depends on how you exercise the rules of allocation.” said Rob Ogelsby, associate part­ner at Parker Avery Group. For example, a customer who walks into a store has already invested time in seeking out a specific piece of merchandise.

“The reward should be instant gratification and the ability to walk out of the store with their selection.” he said.

In order to avoid disappoint­ment, retailers must maintain continuous stock, fulfilled from the same central point that also fulfills online orders.

“From my experience, it is best to still forecast by channel – or even by customer.” Ogelsby said. “It is much easier to aggre­gate these forecasts to a common pool – and make decisions on ‘safety' once the aggregation is complete.”

Forecasts can be tested and challenged at the channel level, and channel managers can be held accountable for their fore­casts, while the firm can leverage the power of the com­bined forecasts.

“Multichannel is the present and future. It's a fact of life. In order to simplify the process, it's imperative that a company take a holistic approach to managing inventory in a common pool across all channels they service,” Ogeslby said. “Once that phi­losophy is adopted, the inventory management system needs to be configured with the appropriate rules to ensure that inventory is utilized in the most efficient (and profitable) way.”

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