Companies that keep inventory in multiple locations could end up playing a shell game with customers. A shopper may try to buy an item only to find the business stores it in a different facility. A lack of communication between stockrooms and warehouses means even managers could lose track of the location of goods.
Orders coming from multiple channels only complicate matters further. A business must have inventory on hand to supply online shoppers, in-store customers and regular clients. Many organizations meet these challenges by centralizing stock in a distribution warehouse.
Retailers change business practices
Successful companies must constantly update their practices to meet new obstacles. For example, Wal-Mart is one of the largest retailers in the world and the Wall Street Journal detailed how the industry giant shifted inventory procedures to keep up with modern consumers.
Wal-Mart faced numerous stock-outs in recent years due to inefficient inventory distribution. Multiple store locations found themselves with a lack of flexibility when it came to shipping and receiving merchandise. New e-commerce customers created a demand for a greater variety of goods, delivered faster than the business could handle.
The company decided to prioritize its distribution centers. Instead of shipping massive amounts of stock to stores, Wal-Mart kept the bulk of its merchandise in a centralized warehouse and supply locations as needed. Keeping more products under one roof allowed the business to fill multiple smaller orders coming in from omnichannel sources.
Warehouses focus on inventory
Retailwire said Wal-Mart’s new strategy worked because warehouse workers have better inventory habits than store employees. Retail spaces take too long to communicate stock needs and replenish supplies. Warehouse managers, however, make consistent, dependable merchandise levels their primary goal. It is much more efficient for a distribution center to supply locations and customers than it is for store teams.
Without the distraction of customers and retail display, warehouse workers use procedures and tools solely devoted to product movement. Distribution center employees can use barcode scanners to log every action and create real-time numbers. New solutions like a mobile warehouse inventory management system provide data visibility to all invested parties.
Every location can receive updates from a centralized warehouse about the availability of stock. Online resources should also plug into distribution procedures, so e-commerce customers get accurate inventory levels and realistic shipping schedules.
When is a centralized warehouse a smart move?
Companies should evaluate their current procedures to see if their current market warrants a shift in inventory practices. Supply Chain Quarterly advised businesses to constantly examine the data provided by suppliers, customers, shipping performance and inventory management to see which solutions are right for them.
A business may want to prioritize warehouse operations when it offers its products to omnichannel customers, opens more locations, has efficient shipping procedures or the tools necessary to report centralized inventory levels. Microsoft NAV barcoding and other ERP add-ons are helpful for companies that need real-time information for any supply chain model.
Company managers who want to reevaluate inventory procedures should download the Warehouse Mobile Data Dynamics NAV Module Data Sheet to explore new options.