Is it time to replace your inventory management software, the “core” system that runs your retail operations? Maybe it is, and you just don’t know it. This article identifies 11 common symptoms that suggest it’s time to make a change.
Have you been hitting snooze repeatedly?
It is common practice to delay the process of fixing a problem until it becomes too big to ignore. This seems more likely to happen when things get worse slowly, like declining eyesight. Has your company been brushing off daily problems with the inventory management software as “minor issues”?
If so, a word of caution – weak inventory management systems cause bigger problems than you can fix overnight. It will pay for you to heed them long before you face a full-blown crisis. In this situation, cure is definitely better than prevention.
Watch for these 11 symptoms:
1. You can’t provide the level of service your customers expect.
For example, a customer asks if an item she wants is available in her size at a nearby store. Your store associates can’t answer the question in less than two minutes.
2. Your system doesn’t support the growth and complexity of your operations.
• You operate too many locations for the capacity of your system.
• You do business in languages, currencies, or units of measure that your system doesn’t support.
• Your supply chain is too complex.
• Your system can’t handle the full variety of merchandise you carry.
• System processing takes too long for your current number of stores, SKUs, transactions, etc.
• You’ve acquired or merged with another retailer and your systems are incompatible or aren’t scalable to incorporate the entire organization.
3. You need better control over your finances.
• You want to switch from the cost method of accounting to the retail method, or vice-versa.
• You want a better view of inventory valuation.
• You want to do a better job of planning revenue and profit.
• You need tighter control over cash flow.
4. Your system doesn’t support omnichannel retailing.
• A customer wants to know why your in-store price is different from the price on your website. You are not sure why, it could be a mistake or you simply have separate pricing structures for each channel.
• You maintain different inventories for your stores, your online operations and the distribution centers that supply your stores. The redundancy causes you to carry more inventory overall.
• You do not have the option of fulfilling a customer order or a store transfer from the nearest location with inventory availability.
5. You’re having trouble managing your inventory.
• Your inventory is out of balance. You don’t have enough of the right product where you need it and you have too much of the wrong product where you don’t.
• You can’t trust the accuracy of your inventory counts.
• You have too many markdowns for inventory that isn’t moving and it’s hurting your margins.
6. You have poor integration among your key business processes and systems.
• You have to enter the same data multiple times in different systems.
• Key data is often inconsistent across systems.
7. Your business processes are too manual.
• You use spreadsheets for many of your processes. They’re cumbersome and inefficient.
• Your systems force your people to perform too many redundant processes.
• Inefficiencies are eroding profit. Your general and administrative expenses are high, measured as a percentage of revenue.
8. It’s too hard to get the data you need to make better decisions.
• Your systems don’t collect all the data you need.
• It’s too hard to get the data out of your systems.
9. Your technology is obsolete or obsolescent.
• Your systems are unstable or unreliable.
• Your cost of technical operations, system maintenance and support is too high.
• The only people who can support your retail systems are nearing retirement.
• You can’t find enough technicians who understand the technologies you use.
• Your systems are poorly documented.
10. Your “core” retail system doesn’t support mobile operations.
• You want your regional managers and store managers to use an iPad or a tablet computer to manage operations, but your system can’t enable it.
• You wish to have more speed and agility in your overall operations but the speed of your system slows down the entire company.
11. You struggle to provide proper support for system users.
• The performance of your systems is drifting because your users often neglect basic data maintenance.
• Your system users are poorly or inconsistently trained. They’ve slipped into bad habits, and you don’t have good training materials for new people who come on board.
• Your internal help desk doesn’t understand your systems well enough to provide useful help for many of the issues your users face.
If you find yourself identifying with at least five of these 11 symptoms, it is definitely time to sit down and evaluate the capabilities and life of your merchandising system. A new system could not only resolve the present operational as well as organizational issues but also equip you for the future.
What can a new inventory management system do for you? Simply put, it can infuse speed and energy into your business, increase current revenue and profit margins and also provide new opportunities for growth. It could save you a lot of money and headaches. And depending on your choice, you could see great improvements well within a year.
Have you heard the proverb “the best time to plant a tree is 20 years ago”? The second-best time is today. Maybe the time has come to think about replacing your inventory management system — soon.
What other symptoms have you seen that suggest it may be time for a new inventory management software?
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