Retailers need more sophisticated technology to manage inventory in an omnichannel world. Tools that improve visibility and flexibility are at the top of the list.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
For most retailers, striking the right balance between in-store and distribution center inventory levels has become a serious headache due to omnichannel requirements and the need to respond to changing customer demands more quickly than ever before. Such challenges are causing organizations to take a closer look at how they manage inventory, especially if they are using multiple platforms to do so. For many, developing a singular view of inventory and improving flexibility across their networks are keys to managing today's increasingly complex supply channel.
"There are two key disruptors when it comes to inventory management," says Michael Salmasi, co-founder of New York City-based Veea, a platform-as-a-service (PaaS) company that provides a suite of technology solutions for business and consumer needs, including retail. "One is omnichannel or cross-channel fulfillment, and the other aspect is that we are living in a more dynamic marketplace. This is having a huge impact on the way inventory is managed. E-commerce and omnichannel [in particular] have become a huge burden for managing supply chains."
Those disruptors are making forecasting more difficult too—and if your forecast isn't right, your inventory won't be right, adds Patty McDonald, global solutions marketing director, Retail Solutions Division, for Dallas-based Symphony RetailAI, which provides artificial intelligence-enabled technology solutions for retailers and consumer packaged goods (CPG) manufacturers. She says many of the problems surrounding forecasting replenishment and inventory management stem from retailers' tendency to have different platforms and point solutions for managing inventory in different channels, which makes it difficult for them to get a clear view of inventory so that they can make good stocking decisions and, ultimately, provide the best possible customer service.
"You can't do [any of] that if you can't see your inventory," McDonald explains. "It seems simple to say that, but a lot of what we see is that customers manage inventory in different systems. ... If your e-commerce orders come into a separate system from your brick-and-mortar stores, how will you effectively manage inventory across channels? If there is not enough inventory in the warehouse, then you must determine priorities. It requires knowing the total picture."
The best way to improve the picture is to make sure there is a common and real-time view for managing inventory and by implementing solutions that promote the fluid flow of information between systems, say technology providers such as McDonald, Salmasi, and others.
What follows are some ways to make that happen.
TACKLE ONE ISSUE AT A TIME
The advent of e-commerce—and along with it, trends such as buy online, pick up in store (BOPIS) and buy online, return in store (BORIS)—has complicated the inventory management process by increasing the number of channels retailers must manage. Organizations trying to get a better handle on the problem often find themselves wondering where to begin: How do I make sure I have enough in-store inventory to meet BOPIS demands? What is the best way to manage BORIS services?
The key is to tackle one issue at a time, says Nick McLean, CEO of OrderDynamics, a provider of cloud-based order management technology solutions based in Richmond Hill, Ontario.
"It's really about thinking through this in a phased approach," says McLean. "That's the primary advice we would have."
Doing so means first taking a step back and considering basic factors such as the type of business you're in, the products you sell, and your physical location and assets. This allows companies to establish better processes that will then allow the implementation of better technology solutions. McLean points to BOPIS services as an example. It's much easier for a big box retailer to set aside the space needed for such services than it is for a smaller retailer located on the second floor of a mall, he reasons. The big box likely has more inventory space to begin with, will find it easier to set aside space for pickup, and may even be able to add ship-from-store capabilities. A smaller retailer may not have the space for such activities at all, finding it necessary to develop creative solutions to the problem—only offering such services at certain outlets, for example, or reconfiguring space to accommodate packing and shipping activities. Both entities must deal with staffing issues—in the form of scheduling and compensation changes—as workers' duties change.
"These are nuances people are [addressing] as they think through omnichannel and the way they [manage inventory]," McLean says. "And there is no way you can implement these changes in one fell swoop."
Charles Dimov, vice president of marketing for OrderDynamics, adds that once those issues are addressed, companies can begin to tackle the inventory visibility piece of the equation. He points to an OrderDynamics customer that made key changes to its inventory strategy after putting the building blocks in place to accommodate combined online/in-store services such as BORIS and BOPIS. Using a single inventory platform, the retailer could see all available inventory across its network and make in-store inventory visible to shoppers online, helping to drive them to its retail outlets to make their purchase, or to pick it up if purchased online. The retailer eventually added a ship-from-store service option as well. Together, these changes allowed the retailer to keep more inventory in the field, closer to customers, and led to the elimination of one of its distribution centers.
"This is a powerful tactic if used correctly," says Dimov, pointing to both the cost savings and improved customer service levels the project yielded. "There are so many opportunities [available to you] when you have a powerful system in place."
GET THE RIGHT TECHNOLOGY
Technology providers point to distributed order management (DOM) systems as tools that can provide the level of visibility retailers and their suppliers need to better manage inventory. These are order management solutions that address a range of functions, including inventory, order routing, analytics, and shipping. Such systems can unify inventory management across all channels; manage order types and channels all in one place; provide real-time visibility of demand to manage vendor, store, and customer orders; and prioritize tasks and optimize inventory performance, according to Symphony RetailAI. McDonald adds that such systems make order management "simple, automated, and dynamic," allowing retailers to:
View inventory availability across the supply chain so they can select sources depending on factors that matter most—leadtime, freshness, lower cost, and so forth.
Split multiple product order fulfillment across locations based on availability.
Use product returns in one channel for order fulfillment in another.
"It's so important to have a platform and process that support one [view] of inventory and all the challenges that go along with it," McDonald says. "[You also need] something to manage the forecasting and fulfillment that needs to happen for all of that inventory. You really need a single platform that can simplify all that."
Salmasi agrees, emphasizing the difficulty brick-and-mortar retailers face in today's environment compared with their online-only competitors.
"The expectations that come with e-commerce now come with brick-and-mortar stores," he explains. "They now have to do what they do well and what the e-commerce giants do well. They have to manage both pieces."
Such challenges require a more sophisticated approach to managing inventory and to the technologies used to do so. Order management solutions that incorporate analytics and allow the sharing of information between trading partners can provide the visibility and agility required of today's supply channel, technology providers argue.
"There are a lot of demands on retailers and their suppliers for faster, better [service]," Salmasi explains. "Buy online, pick up in store, buy online and have it delivered the next day—those services put tremendous pressure on the supply chain. Even something as simple as free product returns can be complex.
"In order to do it all well, [retailers] need more sophisticated technology solutions than they've had in the past. They need systems that work together."
A team from the University of Tennessee, Knoxville, walked away with top honors at this year’s event. It was the school’s first time competing in the scholarship competition, which was held during IANA’s Intermodal Expo in September.
The winning squad included students Jaren Bussell, Elizabeth Shuler, Brock Sooley, and Kathryn Whittaker and was coached by Dr. Donald Maier, associate professor of practice–supply chain. “It is exciting to see what the students can achieve in five hours. Each team reads, analyzes, and prepares a presentation with no faculty input,” Maier said in a release.
In addition to UT, participating schools included the California State Maritime Academy, College of Charleston, Georgia Southern University, and SUNY Maritime as well as the universities of Arkansas, Maryland, North Florida, North Texas, and Wisconsin at Superior.
IANA’s scholarship awards support curriculums designed to attract students to careers in freight and intermodal transportation. Since the program’s inception in 2007, IANA has awarded over $5.3 million in scholarships.
Family-owned business Cibao Meat Products, a producer of Hispanic-style sausages and deli meats, has long prided itself on staying true to the traditions and values the company was founded on in 1969—like a commitment to high-quality ingredients and a family workplace atmosphere. Less of a source of pride, however, was its continuing reliance on the same, mostly manual, processes and data management techniques used at its inception.
With the company now selling its meats to retail giants such as BJ’s, Sam’s Club, and Costco as well as 500 supermarkets and restaurants across the U.S., Cibao president Heinz Vieluf Jr. knew that it was time to take the company into the digital age. “As a third-generation leader of a multigenerational company, I put an emphasis on bringing our business into the digital future and utilizing technologies that will help propel success,” he said in a statement.
IN WITH THE NEW
In Cibao’s case, that would require modernizing its data-collection practices. Because the meat producer still relied on legacy processes, its company data and customer data were siloed, scattered throughout departments from sales to manufacturing to accounting. Teams were manually gathering information and creating reports on a weekly or biweekly basis. As a result, company leaders had no real-time visibility into business-critical operations. On top of that, creating those reports ate up hours of team members’ time each week.
For help bringing all of its organizational data into one central location, Cibao turned to the Slingshot work management platform from software company Infragistics. In October 2023, the company began working with Slingshot to compile data from multiple sources into a centralized hub that would be accessible to every employee.
Today, with the new platform in place, Cibao is benefiting from enhanced data transparency across the company and from accelerated data-reporting capabilities. Employees can now create reports within minutes, eliminating the biweekly reports in favor of daily assessments and unlocking insights needed to make critical decisions 10 times faster than before—saving 120 hours a month, the company says. For example, now that it has real-time access to its customer payment data, Cibao’s accounts receivable team has been able to detect any discrepancies in real time. This has allowed the team to check in with customers as soon as they notice a potential issue, which has increased the company’s cash flow by $40,000 a week on average, or up to 65%.
STRENGTHENING THE BOTTOM LINE
With teams saving hours each week on reporting, Cibao employees can now concentrate on higher-value tasks. For instance, they have more time to connect one-on-one with clients and develop relationships, instead of getting held up on the back end. They can also focus on new marketing efforts and promotions, not only boosting customer satisfaction but also helping to grow existing customer relationships and develop new ones.
“We created Slingshot to bring together data that has traditionally been spread across departments into one completely accessible space so that companies can better drive productivity, insights, and ultimately business results,” said Dean Guida, founder of Slingshot, in the statement. “By bringing its data into a central location, Cibao Meat Products has unlocked insights that have allowed [it] to move strategically and at a faster pace, strengthening the company’s bottom line.”
As autonomous systems take on a bigger role in logistics and industrial production applications, the race is on to make the equipment smarter, more efficient, and safer. To accelerate work in this area, the German lift truck and logistics technology vendor Kion Group is partnering with a local university to support expanded studies on artificial intelligence (AI) and autonomous systems.
According to Kion, Peitz’s work will focus on the development of autonomous systems that operate intelligently and safely for all parties involved, with a particular focus on autonomous mobile robots, forklift trucks, and AI-based systems that are used in logistics and production environments.
The objective of the endowed professorship is to advance the field of research at the highest international level, Kion said in a statement. In close collaboration with research networks and other partners both within and outside TU Dortmund University, such as the Fraunhofer Institute for Material Flow and Logistics IML and the Kion Group itself, the professorship will form a “hub” for digital and intelligent logistics, the company added.
American skin-care company ET Browne—best known for its Palmer’s Cocoa Butter—has trimmed costs, boosted revenue, and increased profits thanks to a recent IT upgrade from its longtime technology partner Syspro, a global enterprise resource planning (ERP) software provider that specializes in serving manufacturing and distribution businesses. ET Browne has run on Syspro software for 25 years and racked up some of its biggest year-over-year improvements following a 2023 upgrade to the latest version of Syspro ERP—an enhancement that allowed it to leverage the platform’s material requirements and planning (MRP) capabilities to build a just-in-time inventory system.
The net result? A smoother-running supply chain.
“We’ve successfully relied on [Syspro] for more than a quarter century while both growing and aligning our business to take advantage of the [platform’s] enhancements,” Pieter Goes, ET Browne’s vice president of IT & BI (business intelligence), said in a statement describing the project. “After bringing in [Syspro] to do native demand forecasts, we were able to better evaluate key markets and key customers, enabling our forecasting and capacity planning to be much more accurate. As a result, we can achieve a fill rate of greater than 95% and are able to process our purchase orders much sooner, resulting in better supply.”
NEW CAPABILITIES, BETTER OUTCOMES
Syspro’s MRP capabilities allow companies to balance supply and demand for materials and components so they can accelerate manufacturing production. With the system upgrade, ET Browne was able to take advantage of those capabilities to gain better visibility and control over inventory and the supply chain. As the companies explain, this allowed ET Browne to predict demand, understand how filling the projected sales pipeline would affect production schedules, and anticipate the peaks in demand it would need to buffer.
Leveraging those demand forecasting and supply chain management capabilities, ET Browne created a just-in-time inventory system that has dramatically reduced the amount of raw material and product it keeps on hand—a move that is translating into increased profits: Since implementing the upgrade, ET Browne has reduced inventory by 22% and increased profits 113% on 7% revenue growth.
ET Browne’s leaders say they intend to leverage Syspro to manage emerging challenges as well. Those include meeting growing consumer, distributor, and government demands to use recycled materials in packaging, while also making sure the company first uses up the materials it already has on hand. That transition will increase complexity within the company’s bill of materials, something Syspro’s management capabilities can help it navigate.
“[Syspro] ERP provides much more than just financial management,” Brian Rainboth, CEO of Syspro Americas, said in the statement. “Our platform empowers mid-market manufacturers to create accurate demand forecasts [and] project exactly how much raw material they’ll need to order and how much product they need to make to meet demand. We’re proud to celebrate 25 years with ET Browne and look forward to enabling future growth and profitability as the company deploys additional capabilities with [our] platform.”
Keep ReadingShow less
Illustration courtesy of Clean Energy Fuels Corporation
For consumers, the car-buying process generally includes a test drive so they can see if the vehicle lives up to its hype before they plunk down any money. But the process can be a little more difficult for commercial fleet managers.
The 2025 Peterbilt 579 day cab tractor, branded in Clean Energy’s signature green, will be available for fleets to test on their normal routes for up to two weeks. And if you don’t happen to have an RNG fueling station in your own yard, that’s no problem: The fleets testing the demo truck will be able to use Clean Energy’s fueling infrastructure, which consists of over 600 stations across North America, 200 of which have public tractor-trailer access.
First in line to try the new rig—which can haul heavy loads for an 800-mile range—is transportation and logistics giant J.B. Hunt Transport Inc. After Hunt completes its trial, the truck will make its way through large and medium-sized heavy-duty trucking companies in California, Arizona, Texas, Oklahoma, Ohio, Michigan, Pennsylvania, and Florida. Clean Energy says it expects to run the X15N demo truck program at least through 2025.
“Vehicles powered by renewable natural gas produce significantly less carbon emissions throughout their lifecycle and are more compatible with today’s available infrastructure than most competing emissions-reduction technologies,” Greer Woodruff, executive vice president of safety, sustainability, and maintenance at J.B. Hunt, said in a release. “The new technology and supporting fuel network in this pilot have the potential to be a viable, cost-effective solution for customers wanting to decrease their carbon footprint in the near term.”