How system integration in retail solves issues with inventory management

Meet John – a customer of your online store. John really likes the wide selection of clothes you offer, and eagerly adds items to his basket. He is planning to spend the upcoming holidays with his girlfriend’s family, so he wants to look his best. He expects that the delivery of the ordered shirts and jackets won’t take long. It would be truly terrible if all those nice clothes didn’t reach him before the departure. And that can certainly happen if your company has issues with inventory management and logistics.

What are the causes of long delivery times in retail?

What does “issues with inventory management” mean? The range of problems is wide, but in most cases, the main reasons for delays in delivery are problems with communication. This happens, for example, when:

• company’s ERP system is not integrated with an e-commerce platform,
• there is no software for communication between all warehouses,
• there are errors in spreadsheets prepared by employees,
• inventory is tracked manually,
• inventory is not updated often enough.

The issues listed above may result in consistent stockouts, missing goods, costly differences between supply and demand, deliveries going to wrong addresses, significant loss of invested money, and –what is even more crippling for businesses that want to grow – inaccurate forecasting.

You also can’t forget about the simple fact that every problem with inventory affects your customers. Long delivery times, incomplete orders, missing shipments – all these things can cast a dark shadow on your company’s image.

System integration in retail – a way to prevent losses

There are many digital solutions that are used to enhance inventory management and customer experience – ERP systems, CRM systems, dedicated applications, and e-commerce platforms. But in many cases, these solutions are working in isolation and not exchanging data. What are the consequences of that?

First and foremost, because of lack of integration, a change in one system is not reflected in other systems, unless an employee manually corrects that. That means the systems used by employees often have inaccurate values, which leads to a snowball effect of mistakes – and loss of money in the process.

What is more, the lack of integration between the retail ERP system and the e-commerce platform used by customers usually causes huge damage. Customers order items that are out of stock and do not receive correct information about the estimated time of delivery. That leads to a loss of credibility, and – in a world of customer reviews – may also cause significant damage to the brand’s image.

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With integrated retail systems, every change in the inventory is reflected in all connected applications and software. As a result, there are no orders for goods that are unavailable, employees do not waste time carrying requests from one system to another, and data is accessible and easy to compare and estimate. This creates a good foundation for the further growth of the business.

Examples of system integration in retail

The way of integrating systems in the retail company depends on the business needs, existing solutions and legacy, and restrictions. This is why the entry phase of the integration project – when the software company carrying out the task gets to know your business from the inside – is so important. After that first phase, the company can suggest numerous solutions. Among many others, these may include:

• integrating a retail ERP system with an e-commerce platform, such as Magento

Enabling data exchange solves such problems as overselling or allowing the purchase of goods that are out of stock. Every item purchased by a customer is recorded in the ERP system, so it is immediately clear that the inventory has changed.

• integrating inventory management systems covering all warehouses

It is crucial for the proper management of your business to know what you have and what is missing. That’s why, if you have many warehouses, it is very important to see their entire inventory in one place. This allows you to take the necessary actions: for example, decide to move goods from one storage to another or change the stock threshold depending on the demand.

• creating a mobile application that enables access to integrated company system data

Instead of moving data from one system to another, or checking the required information using a desktop in an office room, employees can access integrated systems via mobile applications, anywhere and anytime they want. That solution can be a real time-saver for employees.

• creating an integrated package-control system

This solution solves the problem of manually tracking changes in the inventory. Instead of leaving the task of flagging items leaving the warehouse to employees, it is better to assign machines to do that. It can be done, for example, by scanning the ordered items with a mobile application designed especially for this purpose. The application communicates to the EPR system that the item is flagged as “ready to be delivered”, which also changes the status of inventory in all connected systems, making mistakes very unlikely.

• deploying integrated retail systems to the cloud

Thanks to the cloud connecting all software, it is possible to update data on every system in real time. That means the inventory status will always be up-to-date, and all users – be that employees, analysts, or customers – have access to real-time data on goods availability.

There are many, many more options – as we said, it all depends on your company, its needs, and restrictions. But the list above shows how wide the range of possibilities really is.

Can system integration help you?

That depends! Take a moment to establish what software your company is using and what problems you are facing. With such information, we will be able to determine what kind of solution could help your business the most. Don’t hesitate, make the first step to the digital transformation of your company with our talented engineers!