Global Market Outlook on Inventory Control

Inventory management is predominantly executed through a technology platform with data inputs from various sources including store counting. In addition to stock replenishment, objectives such as loss prevention, increased visibility and monitoring real-time sales trend have become vital for apparel retailers.

Inventory Management System: Item Level

Store Returns/ Transfers

  • Data pertaining to products returned. Returned goods could also be defective, hence they are sorted accordingly

Loss Prevention Analytics

  • In addition to stock replenishment at stores, inventory management proves to be a vital visibility tool aiding in prevention of losses

POS Data (Perpetual Count)

  • Perpetual inventory data is generated through data from POS systems
  • The inventory ledger is updated after every transaction at the store

Warehouse Stock Levels

  • Warehouse stock levels are updated based on the goods arriving from suppliers and manufacturing plants
  • It is generally coordinated with data from 3PL or the retailer, who manages the warehouse

Store Inventory Counting

  • At store level, items are either counted by a full-service inventory count service provider or by the retailer themselves
  • Cycle counting and annual counting are different methods involved in inventory counting

Inventory Counting: Techniques

Best-in-class retailers prefer to adopt perpetual counting in addition to cycle counting to gain better visibility on supply chain, which facilitates less shrinkage losses and out-of-stock time. Perpetual inventory technique also helps in building analytics to perform
demand–supply models, which majorly supports assortment decisions.

Periodic Counting

Cycle Counting

Method 

  • Physical count of inventory conducted as quarterly, half yearly, and annually across stores in cycles

Tools

  • Store & Warehouse: Handheld barcode/ RFID scanners

Benifits

  • No need of store closure
  • Reduced errors
  • Ongoing inventory shrinkage performance

Snapshot Counting

Method 

  • Inventory count taken at all the stores simultaneously during the end of financial year, usually Jan/Apr-Jun

Tools

  •  Store & Warehouse: Handheld barcode/ RFID scanners

Benifits

  • Greater attention across the management
  • Requires operational shutdown

Perpetual Counting

POS Counting

Method

  • Physical count is determined continuously at the store, based on sales data and warehouse data
  • Count data is linked to the ERP system for assortment decisions

Tools

  • Store: POS System - Barcode/RFID enabled
  • Warehouse: WMS

Benifits

  • No shutdown required
  • Prevent shrinkage Losses
  • Increased supply chain visibility
  • Quicker product demand–supply forecast