Inventory planning practices are driven to a much more fluid process due to the changes in consumer shopping and purchasing practices. Planning and forecasting must take into account now the changing consumer shopping as well as purchasing practices to provide a model that can support the opportunistic purchasing practices that are increasing in volume and importance. The integration of technology into the consumer practices is the single greatest challenge for retailers to overcome and these consumer changes are rippling through the marketplace and all practices supporting the marketplace. Consumers are now practicing more fluid shopping and purchasing based on the technology and I feel that one of the greatest impacts is presented by mobile technology and wireless technologies.
The good news for retailers and the extended supply chain is that this increase in technology utilization provides a great opportunity for retailers to interact and collaborate directly with consumers. The bad news for retailers is that this increase in technology utilization allows consumers to shop across multiple channels at the same time, allowing consumers to purchase any time from any channel. This flexibility then increases the complexity of inventory planning and forecasting and this is driving additional disruption in the marketplace. These consumer practices disrupt the forecasting and planning accuracy and this disruption of accuracy leads to increases in markdowns and on the flipside this also leads to lost sales when inventory is not available for purchase.
More than ever, everything is connected in the extended supply chain and as a result, inventory planning and forecasting must also take into account these connections and data available from these connections to improve the accuracy of the forecast. This means that retailers must extend their collaborative relationships and include the data collected from these relationships to improve their planning and forecasting. Technology is driving the opportunities for both collaboration and extensions to the sales channels and these opportunities must be taken into account when developing inventory plans and forecasts.
The good news in this story for retailers is that technology is also available for retailers to increase their collaboration with consumers and then to maintain the information collected. Big data capabilities provide the means for retailers to make this data collected actionable to improve their forecasts. Consumers are investing in technology at greater levels and then using this technology to support their lifestyle changes and requirements. Retailers must now also invest in technology and business process improvements to support the consumer changes. This includes using technology and social networking tools to collaborate with consumers to improve their inventory planning and forecasting accuracy.
And now for the audience participation portion of the show…
ECommerce will have wide ranging impacts on both the retail and manufacturing sectors. How can you focus these abilities to improve the consumer's experience? Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes. In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas. How can you support these continuously changing requirements?