Optimization is defined as “to make as perfect or as effective as possible.” We apply that directly to the notion of all things inventory. Retailers carry inventory to satisfy the needs of their customers, profiting in this endeavor so they can replicate their locations, pay their employees, and contribute to the communities they serve. Inventory, however, is expensive. Too much inventory is VERY expensive, but too little just might be worse.
So, the question might be: Is there a way to have just enough inventory? Can we meet all my customers’ needs, and not have any extra product that’s not needed, or worse, wasted.
The definitive answer is a resounding YES, but it takes discipline, not extra work, to make it effective. Discipline to ensure maintenance items are completed timely so orders are accurate. We call them TRUSTED. This means that no human ever has to touch an order – unless they want to.
Just in time! It was all the rage in the 80’s when we first learned how the Japanese managed their assembly lines. The very idea we do this same thing in retail, particularly in supermarkets, somewhat defies logic. After all, a manufacturer can easily put a finite number on an the volume of finished goods they’d like to produce. It’s just simple math at that point to determine when and how much raw material to order. It’s not without complication, it just isn’t as difficult to know how much to make.
In grocery and convenience stores, the HOW MANY is that harder part to establish. We’re talking about the fickleness of the end consumer, and their purchasing choices are as established as, well, they aren’t. Sales, coupons, new items, loyalty (or lack thereof) at any level, all contribute to the fact that the CONSUMER DEMAND FORECAST just isn’t that easy to figure out.
At Itasca Retail, we have. Our long-established Artificial Intelligence and Machine Learning capabilities forged movement into new territory. We found that many other vendors and retailers alike had tried to solve the varied inventory problems that plagued the industry – and failed. We didn’t and we continue to