Many companies are using technological tools that change the way inventory management is conducted. In our fast paced, global market, companies cannot have idle assets and goods piling up. Inventory carrying costs can significantly impact the bottom line and congest cash flow operations. Accurately forecasting sales and demand is important in order to approximate the appropriate production volume to avoid these costs. How does a business deal with being too optimistic with its forecast and produce too much? It must find the most efficient ways to sell these extra units in the shortest amount of time. What type of technology is there that can solve the dilemma?
The Washington Post had an article covering one of the possible solutions. A law school graduate and entrepreneur, Fuentes, explored ideas on how to improve processes and sales within the retail store he worked for. He collaborated with his supervisor and executives regarding the problems he saw and how he can help them move products faster out of inventory.
Fuentes began experimenting with his new ideas with customers and said that he could possibly discount a particular item in two to three weeks and contact them if they were interested. He then tracked who wanted to be contacted and what item they were interested in buying at the discounted price. Before a product goes on clearance, it can be sold to some who is already interested. This system inspired Fuentes to create Lemur IMS. He describes it as, “An inventory management system for big-box retailers that connects local customers with local, slow-moving inventory.” He found this to be especially helpful to smaller stores that needed an edge to compete with larger stores in the community.
The Lemur IMS is effective because it increases revenue and more importantly, delivers personal attention and offers customers the products they want at a better price. This is fantastic because it decreases the amount of customers that turn to alternative competitors for lower prices or easier accessibility for the specific product they are interested in. If they like a product but do not want to pay that price, the store can offer to contact the person if the product is available at a lower price later.
A relevant trend and (obvious) concept that is providing customers with greater value is customization. Lemur can be used on a tablet app, which is customized for each specific retailer. It can even go to the extent of tracking, “who is interesting in what product, at what time of the year and at what price.” Fuentes mentions that his tool for managing inventory is unique because, “It looks at all aspects of inventory information, not just velocity, cost, and revenue.” This deeper approach seems to be very effective. What other systems are available? What competitive advantages do they offer companies’ operations and inventory management?