Inventory Management process experienced some important changes in the last 5-7 years.
The new competitiveness challenge coming from the economic recession forced many successful businesses to embrace new trends and technologies.
Regardless of the industry they are are in, many top managers realized that they needed to redesign their supply-chain processes in order to beat the competition.
Vodafone, a huge telco company providing a wide range of voice, messaging, data and infrastructure services all around the World, decided to deploy a big data analytics project a few months ago in order to optimize their service catalog management and speed up the purchase orders creation and the communication with suppliers.
Many other companies did the same: the number of (Big) Data Analytics projects showed 125% increase during 2014-2015 and the intention to introduce new technologies in the Operations & Supply Chain Management is higher than ever.
So, if you really want to take your business to the next level, there are no excuses to not empower your operations by using advanced analytics tools.
If you are running an e-commerce business, one of the major challenges relates to inventory. No matter the platform you are using (Shopify, Magento, WooCommerce) or the channels you chose to sell your products, the decisions about the inventory are the same and they are vital for your company. If you produce the items that you sell, your skills in managing materials needs, suppliers, and purchase orders will strongly affect your entire production cycle, your capitals, and your revenue.
Let’s start from the beginning: what do you need?
Why You Need Machine Learning
You need to produce the best possible estimate of your future demand with a deep understanding of the market dynamics, the correlations between your inventory items and a strong support to your replenishment activity.
In two words, you need Machine Learning.
By introducing a Machine Learning based demand forecasting tool in your analytics and decision processes, you can transform your business to perform at a higher level. Discovering patterns and correlations between products in your catalog will enable you to take well-informed decisions. Understanding the relationships among your data and your decisions will give your business a powerful data-driven decision process.
Why You Need Cloud
It may be not a problem for a small store with a few dozen SKUs to be managing all of its inventory on a desktop-based software or a spreadsheet approach. Owners in such business usually succeed in being up-to-date about the inventory status and have little effort to generate (poor) estimates of the future needs.
But what happens if you have a bigger catalog and a multichannel (mandatory for e-commerce) selling activity? It’s way more complex, of course.
Legacy inventory management tools, traditionally desktop-based, have big issues with the data consistency across products and customers who belongs to different channels.
The solution is a manual consolidation activity that puts together all pieces of information relevant for understanding your inventory status. This is a really cumbersome process and it will not scale as your business will expand.
Cloud tools are the solution since they can easily integrate different channels and update your inventory status in real-time: by collecting sales data and product stock changes, they will give you an immediate overview of your catalog and will help you focus on what really matters, your business.