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By Richard Haugen • September 20, 2017

Where The Heck Is My Inventory? (Part 2 of 4)

Missed Part 1?

Becoming Omni-Channel Ready

If a customer went in search of your consumer product category, what are the chances they would find yours within just a few minutes or even seconds? And if they found your product in the category, what would convince them to buy it over a competitor? And if your marketing was effective enough to entice a purchase, would your customers be able to purchase it easily and receive it quickly?

We’re moving into an age where the consumer’s decision to pick one product over another is no longer a matter of simply what the customer wants at the right price with an aesthetically pleasing look. Consumers are savvier now, and they want a lot more out of their consumer goods manufacturers. For the modern screen-switcher, that means your ecommerce platform (or partnerships) should allow them to have a seamless, easy transaction no matter if they’re on their desktop or mobile devices. They should be able to see your commercial on tv and find your website easily, no matter what device is in reach.

Cloud-based ERP helps you build these presences and track the sales and supply of every channel with absolute accuracy, and successful consumer product companies are able to take advantage and adapt to those channels in real time.

This is especially effective and useful if you’re using multiple platforms to push your ecommerce arm and have to distribute to multiple warehouses. When you’re trying to sort out a complex supply chain, knowing exactly where your product is going and how quickly it is getting there can help you move a limited amount of inventory around to match your needs without overspending on shipping and logistics.

You can also use these instant analytics to tailor the distribution of products based on what is selling through certain channels, thus saving even more costs on back end marketing such as ad and search buys. When you’re a small company still navigating where these channels will lead, being able to tailor your spending, warehousing, and logistics across a complex supply chain as an immediate response to your market and customer, can result in enormous long-term savings.

 

Tracking and Plugging the Leaks in Your Profits

Even a few tiny cracks can drain an Olympic-size pool, if the holes aren’t seen and patched quickly enough. Your supply chain is exactly the same, and wherever your supply chain has a handoff of physical products to a shipper or retailer, there’s an opportunity for a leak.

Shipping damage and returns can slowly cripple any consumer products company, especially if your product is physically large or heavy. Something as commonplace in a warehouse as a forklift bump or puncture can cost you thousands of dollars in product, and thousands more due to costs associated with the return of useless products back to you for repair or scrap.

Real-time supply chain monitoring can help you figure out not just where your product is going, but when it might be time to switch over to a more careful warehouse or warehousing team. If you notice that one warehouse in particular is having a high percentage of product loss, you know exactly where to investigate for negligence or theft. This allows you to fix the problem quickly, and get back to running your business.

Significant losses are also incurred if your returns process is inefficient. SAP’s ERP solution can help by standardizing a process of returns, inspections, and return-to-stock procedures and replicate them over several product lines. Automating your returns inspections is critical to achieving maximum efficiency, and a strong ERP will have these processes built in from the start.

In the case of a product recall, having an established protocol for returning product from customers is also essential for making sure you give your customers the easiest-possible experience and, with good customer service, can turn it around into an ongoing, positive relationship. The same goes for returns from dissatisfied customers—returning products they simply don’t want: If the process is fast, easy and streamlined, they could go from an angry customer with a bad experience to a brand advocate shouting from the rooftops about how great your company is to work with.

And just like with negligence and theft, you can track individual checkpoints to see where you’re incurring excess returned product losses. Even little things like being able to track where your shipments are during inclement weather and giving your retailers an estimated delivery date for merchandise can make it that much easier to grow your business. It also makes it easier to find out what is not working when it comes to your product and certain markets or sets of customers.

Damage, loss, and returns are not things anyone wants to think about before hitting the market, but it is inevitable—there will be errors, theft, and shipping loss along the way. The faster you can identify the processes that lead to these problems, the faster you can plug the holes in your cash pipeline. As the adage goes, the devil is in the details. When you can track every detail in real time, you can refine those expensive troubleshooting periods into quick, surgical fixes.

Continue to part 3