15 Aug 2024
Effective inventory management is a core factor in the success of a supermarket. It can directly affect the machine operation, effective results in administration, and customer satisfaction. However, many supermarket chains have problems operating the inventory to achieve optimal results, resulting in financial losses and ineffective operations. According to research, 43% of retail chains are struggling with accurate inventory operations, employees often check manually which increases the risk of making errors due to manual tracking inaccurate information. A study conducted by IHL Group found that food retailers lose $818 billion each year due to inventory distortion. This article will help you avoid getting into those mistakes, and guide how to use ERP software to optimise the operating process in supermarket inventory management.
Table of Content
The Challenges in Supermarket Inventory Management
Balancing Perishable Goods with Demand Fluctuations
Supermarket inventory consists of various products across categories, including fresh products with concise shelf lives and items that can only be stored for a day. Managing such a multitude of products requires a meticulous inventory management plan to avoid wasting short-lived goods, ensuring that they can be sold within the product’s shelf life and that the quantity of products is still available to ensure supply.
Demand Variability
Forecasting customer demand is one of the biggest challenges due to preferences, new trends, seasonal products, and promotions. A correct forecast ensures an adequate supply of goods, leading to satisfaction in the customer’s shopping experience. On the contrary, if there is an excess of goods, it can lead to a delay in the management process due to overload, unpurchased goods in stock, leading to waste due to disposal.
Human Error
Manual checkout processes in supermarkets managed by humans are prone to errors that can cause substantial financial losses. Typical errors include incorrect inventory counts, inaccurate data entry, and errors in the expiry dates of short-term items. These fundamental mistakes can also cause severe effects in the inventory such as overloading, shortages of products, and loss of customer satisfaction.
Supply chain complexity
Supermarkets are increasingly engaged in supply chains, handling various products from multiple suppliers across an international network. This sophistication is compounded by variable delivery times, seasonal discrepancies in demand, and the need to compare fresh and non-perishable goods. The challenge is blending multiple suppliers, vessels, and warehouses while maintaining inventory levels and freshness. Unexpected disruptions, such as those during the COVID-19 pandemic, can quickly disrupt well-organised supply chains.
How ERP Software Addresses Supermarket Inventory Management Challenges
Balancing Goods and Changes with Real-Time Data Insights
ERP software is a potent tool that helps manage all data related to operations and warehouse management at supermarkets. Dense information flows from different sources in the formula from Marketing, sales, customer orders, product expiry date, product volume, customer management, supplier management, … all the above factors are integrated into a single system, helping the operation process to be more sauce, and faster. Thanks to that, the inspection process is carried out quickly, with few errors, and supermarkets are equipped with screens about the volume of products currently in stock online. The data will change the server and be analysed, compared through the data over quarters and years, to help businesses make quick and accurate decisions.
Improved Demand Forecasting
The accuracy rate will increase significantly when an ERP system is applied to predict customer purchasing needs. ERP systems will analyse and improve future needs, all systematised by past data. And when calculating, the error rate is meagre compared to normal human calculation, human calculation emotions are too high, leading to unbiased conclusions. This ability helps to arrange the space of supermarkets for arranging goods, minimising the risks of overload and shortage of goods. Accurate predictions help supermarkets maintain optimal warehouse space, helping to improve customer experience because customers will always be served goods of standard quality.
Automation of Inventory Processes
The ERP automation system plays a huge role in warehouse management, it covers reorder points, updates the status of goods in the warehouse, and reports changes. When there is an automated workflow, it helps to minimise pure labour, significantly reduces human errors, and maximises efficiency even outside of working hours.
Better Supplier Relationship Management
ERP systems help improve customer relationship management for supermarkets now have features to display supplier performance and enhance communication between supermarkets and suppliers through the ERP system. Enterprise resource planning can check the performance showing delivery time, shipping information, and product quality of different suppliers, helping businesses to filter out reliable suppliers and make wise choices.
Key Features To Consider When Selecting Inventory Management Software for Supermarkets
When choosing inventory management software for supermarket inventory, consider the following key features:
Real-Time Inventory Tracking
This feature improves customer satisfaction by ensuring that the requested products are immediately available and significantly reduces the risk of missed sales opportunities due to being out-of-stock. Maintaining ideal inventory levels allows supermarkets to meet customer demand better, promoting customer loyalty and repeat business. Additionally, this feature helps optimise inventory turnover rates by ensuring that products are quickly removed from shelves, reducing the need for deep discounting to dispose of excess inventory. This balance between supply and demand ultimately leads to increased profits by reducing inventory costs and waste, increasing sales opportunities.
Ease of Use
The software should be simple and accessible to users with varying technical backgrounds. A user-friendly system will decrease adoption conflict, reduce training costs, and improve operational efficiency. Features such as drag-and-drop functionality, intuitive menus, and clear instructions help create a smoother user experience and ensure workers can handle inventory effectively without constant support.
Supplier Management
Effective supplier management is essential to ensure stable inventory levels. The program should include features such as automatic monitoring of supplier performance and interaction with supplier systems. This increases procurement efficiency, ensures on-time delivery, and maintains good supplier relationships. Supermarkets can improve their supply chains and reduce delivery times by streamlining the ordering process and tracking supplier performance.
POS and Accounting Integration
Integration with POS systems is essential for accurate inventory management. The program should be integrated with your POS system to update your inventory in real-time as sales occur automatically. This interface helps maintain accurate inventory counts, reduces actual and recorded data differences, and improves overall inventory management. Efficient POS connections also improve sales tracking and forecasting.
Therefore, inventory management software can integrate seamlessly into enterprise resource planning (ERP) systems, providing a comprehensive view of inventory management, shortages, expiration dates, and data action linkage. In addition, this integration benefits all areas of the consumer system such as purchasing, sales, warehousing, marketing, and customer management. Supermarket chain management can still integrate a cloud-based data ERP solution, designed to increase efficiency for the company’s rapid growth scale, data from different supermarket chains is aligned into a system that determines the best when supported in real-time with data synchronised with the innovative research system so that administrators can make quick decisions.
Conclusion
In short, supermarket inventory management software is a critical choice if you want to promote the performance of the supermarket operation process. It concretises all data, avoids errors due to human error, saves time, and synchronises data. The ERP system not only provides customers with supermarket inventory management but is also a great solution for the integrated system of the business. Take the next step in optimising your business inventory by choosing the right inventory management software. Investing in the right software today will ensure your business’s inventory and success tomorrow. For more information or to receive free consultancy from our seasoned experts on which solutions are the most suitable for your business’s operations, contact us today.
