New survey findings, reported by Supply & Demand Chain Executive (Feb. 28, 2019), uncover the chronic inventory problems affecting the $1.3 trillion retail industry. The vast majority (87%) of corporate retail professionals report inaccurate inventories are to blame for more lost revenue than theft (13%), and the breadth of the problem is apparent: nearly all (99%) survey respondents admit to some kind of constant inventory problem.
Despite major spending on inventory management, catastrophic problems remain.
73% state inaccurate inventory forecasting is a constant issue, meaning retailers end up with too much or too little supply to meet demand
66% say price inaccuracy is a consistent issue, which can lead to unbalanced P&L reports
65% report an inability to track inventory through the supply chain, resulting in potential sales lost
Wasted time is wasted profits.
67% of retailers feel that analyzing inventory on store shelves is not an effective use of employees’ time
Data shows that instead of spending time on sales-driven customer service and upselling, the majority of employee time is spent filling out-of-stock holes on shelves (56%) and pulling items forward on shelves (55%)
Automation is the answer.
76% of retailers say the introduction of robots in stores would improve employee productivity
74% said inventory accuracy would improve as a result, while increased profits would be another direct result of introducing in-store robots
A majority (62%) of retailers feel that employees would embrace robots
An interesting class exercise would be to ask students who have worked in retail what their own experiences have been.
Classroom discussion questions:
- What are the causes of such inventory “inaccuracies”?
- What suggestions does Chapter 12 offer regarding inventory accuracy?