A marketer's goal, for example, might be generating consumer demand. For a person in operations, on the other hand, the goal might be to optimize shipping efficiency by looking upstream at the ERP. With traditional inventory management, these two perspectives and goals are nearly impossible to connect into a streamlined workflow.
Traditional inventory management systems also aren’t built for dispersed digital shelves that combine branded experiences and transactions.
ERP systems typically track high-volume shipments of wholesale pallets based on predictable schedules. They aren't geared toward supporting fast-paced omnichannel commerce environments where it's critical to manage inventory effectively to support individual consumer orders.
Why Duct Tape Doesn’t Belong in Inventory Management
The fact that traditional systems don’t measure up to the realities of today’s digital shelves means that many brands with ERPs struggle to keep pace with hybrid wholesale, marketplace, and DTC commerce. They also have difficulty meeting customer expectations for providing up-to-date, unit-level, and real-time inventory changes across selling points.
Some brands may deal with these new requirements by “duct taping” systems and processes together, introducing:
- An electronic data interchange (EDI) provider to handle drop-shipping communications;
- An integration platform to handle connections with top marketplaces;
- Spreadsheet exports to communicate inventory to long-tail retailers and sales teams;
- An ecommerce platform for their brand site;
- Third-party logistics (3PL) and other warehouse management systems to support fulfillment; and
- A separate inventory management system just for DTC inventory.
Disparate Systems Result in Challenges for Brands
Cobbling together disparate systems introduces complexity to the tech stack, resulting in multiple brand challenges.
First, brands lose a single source of truth for product content that supports multichannel strategies. Without this central source, brands can end up disconnecting product information management (PIM) data from inventory — giving teams only one piece of the puzzle.
Marketing and operations teams then have to learn and work in multiple systems, with handoffs and integrations increasing chances for human error.
Without a single solution to manage products, inventory, and orders, marketing and operations teams must work in multiple systems, follow numerous different processes, and miss out on valuable consumer insights because of the disconnect across channels.
Consistent product content is at the heart of any strong ecommerce strategy, so it’s imperative that brands use a single platform to manage content across products, inventory, and order management systems.
Brands must also be able to prioritize actions across all touch points and test new routes to market. But when they use multiple solutions and systems, execution remains a challenge.
3 Principles for Creating Inventory Systems for Modern Commerce
The secret to growing a brand is bringing the product closer to the consumer — on the digital shelf itself. There are three principles for creating inventory systems within this new world of commerce.
1. Link Experience and Inventory
Inventory tracking and demand planning must take place as close to the end consumer point of sale as possible. Think of inventory as a component of the consumer experience.
2. Provide a Single View and Mode of Management Across channels
Inventory systems need to support a variety of routes to market and accommodate all of the changes and actions required to allocate products across different channels.
3. Drive Predictive Actions
Pay attention to continuous signals from the digital shelf that may drive an increase or decrease in velocity or changes to merchandising strategy.
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