I remember as a kid excited for the first day of school, eager for the bus to arrive so I could show off my new clothes. Only for the bus to arrive, me board, and find 3 other kids wearing the exact same shirt!
It is likely you remember a similar memory too. In years past there just wasn’t the same level of selection, of options.
That was the era of “You get what you get and you don’t throw a fit.” What you saw is what you got.
There were limited retailers in the market. And retailers ordered huge quantities of each style, with little variance. And there was no internet.
Gone are the days of Kmart or Sears to buy your complete wardrobe. And thank goodness.
New Era of Retailing
Today retailers must offer a wide selection of goods to appeal to their buyers unique sizes, tastes, interests, budgets, and styles.
Unfortunately for retailers, also gone are the days of deep inventories.
This is the best case scenario for the customer. Conversely it’s also the worst case scenario for you as a retailer.
Customers’ always win when there are more options and a greater selection of options which cater to each buyers unique interests and lifestyle, as well as their budgets..
However, as a retailer, a wide variety of SKUs, with very little inventory depth means that you may only have one or two items of a given SKU in stock at any time, and therefore you must be acutely aware of your stock levels to ensure that you only carry product in-stock that you know will sell quickly, and only then replace those items with other, small-quantity, targeted merchandising selections. This JIT “Just in Time” approach used to only apply to manufacturing.
Just in Time Manufacturing
“Just in Time” is a manufacturing strategy developed in Japan and utilized since the ‘60’s and 70”. At its core JIT manufacturing is designed to increase efficiency and reduce waste, with the overall goal of decreasing the cost of inventory. It is also referred to as “Lean Manufacturing” because of its goal of maintaining only inventory on-hand that which is immediately needed–nothing more.
Just in Time Retailing – The new standard
Today Retailers must follow this same approach with their own inventory. They must approach their inventory “costs” in the same manner that manufacturers “Just in Time” approach– with the same ultimate goal of decreasing the overall cost of their inventory.
Today you must make your inventory work for you. How efficiently are currently managing your true “currency”, your inventory? Do you have product which has sat for months or years in your store or distribution center? Every single piece of your inventory should be working for you.
To the novice, inventory management may seem simple. Sure, I know what I have purchased. And yes, I know what I have sold. So, in theory, the difference should be what I have in inventory, right?
Unfortunately this just isn’t the case. Inventory is a moving target and the fact that you are reading this article probably means its likely a challenge for your business too.
The truth is no one is perfect at managing their inventory. But you can ask yourself some simple questions to determine how effective you are with your inventory.
– Do you have product that you have purchased and held for 1 year or more that still sits in your store or distribution center?
– What percentage of your inventory turns each month?
– What is the average length of time you carry product before it turns?
Inventory management software platforms have offered solutions with promises of streamlining and organizing your inventory management, allowing you to effectively manage and scale this ever difficult component of your business.
Unfortunately, many have lost hope. These software platforms have each promised inventory mastery, yet nearly all of these platforms offer barcode based solutions.
Barcodes – The Standard Since 1948
The barcode was developed with the purpose of solving the problem of automatically reading and identifying product at check-out, not for performing inventory audits. Why? Because the barcode was developed to identify one item at a time, only marginally better at auditing thousands of items than counting by hand.
Without a transformative technology the process of inventory auditing became a labor intensive, slow, painful process.
RFID – Using the Right Tool for the Job
At this point you might feel helpless realizing that, as a Retailer, customer demands continue to get tighter. Yet, old methods of inventory management are inadequate to provide timely accurate inventory visibility–sufficient for business owners to make proactive decisions required to have inventory management success.
Perfect Inventory at the Touch of a Button
The answer lies in a technology you likely have heard of, but may know nothing about. It’s called RFID and it is revolutionizing how retailers manage their inventory.
RFID changes your relationship with your inventory, from a Last Name basis (SKU level), to a Social Security Number level (EPC #), where every items is now tracked on a serial number level.
What is RFID?
Most people have heard of the acronym RFID, but like most tech “buzzwords” many have heard of it, but may not have minded to pay attention to exactly what it is.
However if you are retailer it’s time to listen up, because this technology will forever revolutionize how you manage your inventory.
RFID stands for Radio Frequency Identification. It is technology which allows product to be tagged with stickers containing a microchip and antenna. RFID transforms tasks that currently require staff days or even weeks, into tasks requiring one person only minutes.
The technology impacts nearly every point of your inventory. From automating processes such as confirming the accuracy of inbound of Purchase Orders, performing daily complete inventory audits, to auditing customer orders for accuracy prior to shipping. RFID can even aid in locating items which are missing by guiding the user to the item, even when the item is not in sight.
It’s human nature to avoid change until it stares us in the face. It isn’t easy to be proactive when something doesn’t feel “broken.” And since inventory management hasn’t changed much in the last few decades, chances are your process doesn’t feel broken.
It is easier than ever to test RFID to learn how it will impact your businesses success and scalability. It’s time to stop and learn what you don’t know.
The world is changing. Only those who embrace change will survive in the coming years. Folk singer Bob Dylan famously penned the words “The times they are a changin’.” Is your business “a changin’” or will it be left behind?
Simple RFID is a leader in providing simple revolutionary inventory solutions designed to directly address your businesses challenges. Reach out for a free consultation today.