Inventory allocation refers to the process of monitoring inventory levels strategically across the distribution network. A proper portion of lists helps ensure that inventory levels and storage costs are optimized and be able to meet customer demand.
Manual inventory allocation
Many retail businesses still manage and track inventory levels manually. Hand-held inventory control involves physical inventory ledgers or tablets as well as manual data for physical distribution decision-making. However, the manual method may pose several challenges to retailers such as lack of accuracy or possible inventory frauds, especially when it comes to managing large-scale inventory.
Tech-enabled inventory allocation
Every retailer must have been required to change the shipping destinations and you might come up with these following questions. Is it necessary to allocate additional stock units? Or should businesses transfer a larger portion of stock to the warehouse where the demand is rising? Or do the businesses need to order a larger quantity of products?
Many retailers have been adopting technology innovations with the aim of effectively keeping track of inventories in real-time. Besides, some powerful innovations can also aggregate meaningful data that enable retailers to make appropriate decisions.
Technology innovations can be implemented in several ways. Commonly, retail businesses decided to invest in robust ERP inventory software. Small and medium scale businesses can consider using useful stock applications developed for small and medium-sized online stores to simplify decision-making for inventory allocation.
ConnectPOS is also developed as one of the most powerful innovations in the retail industry. This solution can greatly assist retailers in managing inventory and tackle problems related to allocation thanks to its various features such as automatically collecting data and generating inventory reports.
Why do you need inventory allocation?
Demand for inventory
Regularly forecasting customer demand can make great contributions to eCommerce businesses. Although you can never accurately predict the exact amount of possible demand, you can consider implementing tools or applications. These innovations will support you to collect, analyse, and predict future sales patterns over time. From these valuable data, businesses can make proper decisions in terms of expense, manufacturing, labor hiring and marketing.
Access to inventory
A significant aspect of streamlining order fulfillment is that products are stocked at the nearest locations to the shipping destinations of your customers. You can discard the risks of arising problems during the fulfillment process originating from manual mistakes.
In order to avoid fulfillment problems, an inventory tracking system should be easily implemented and can connect directly to your online stores. You can then synchronize SKUs and orders in one place to view all inventory numbers, completion center, sales channels, and customer information.
Easy enforcement with order
Proper allocation of inventory affects the speed of order performance as well as the shipping orders costs. For example, suppose you realize that laptop sleeves are via the rooftops in San Francisco and Chicago. In that case, storage space in or near these cities should allocate more inventory than storage space in further areas.
Online shopping businesses bring retailers endless chances to thrive in the retail market. However, when the number of orders increases rapidly and more warehouses are built, retailers will have to face inventory allocations problems.
The development of technology also can greatly support retailers to tackle possible problems such as fulfilling inventory demand or delivery requirements.
Being one of the leading inventory management systems, ConnectPOS provides retailers with outstanding features to help them smoothen their businesses. Contact us now to have 14 days of experience with our globally standard POS solution!