The “black hole” of inventory management

RetailWire panelists spent time recently discussing the interlocking issues leading to chronic out-of-stocks, even in today’s era of improved technology solutions. My comment (which follows) points to inaccurate inventory tracking, which is a problem well within retailers’ ability to solve:

The promise of new technologies like RFID inventory tracking has not been met yet, since many retailers have not made the investments needed to make them work. So many retailers continued to be plagued by what I call the “black hole” of inventory management.

Specifically, stores may book receipts into their on-hand systems at the point of receipt at a distribution center (or even upon receiving an advance ship notice electronically from a vendor). There can be a gap of days between receipt in a store’s “system” and actual delivery of goods to a store. There may be additional delays if tight store payrolls (Walmart, anyone?) cause a breakdown in replenishment between the truck, the stockroom and the selling floor. Meanwhile, the buyer (or the replenishment system) thinks that goods are in stock and can’t figure out whey they aren’t selling.

Retailers are decades past the days where the solution to the “black hole” problem was out of reach. But it requires investments in technology and manpower to fix it.

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