TotalRetail: The Composable Future of Omnichannel Inventory Management

View the original TotalRetail article: The Composable Future of Omnichannel Inventory Management

In the early 2000s, as smartphones and internet access transformed shopping habits, Best Buy revitalized its brand with a buy-online-pick-up-in-store (BOPIS) option, offering pickup within 45 minutes.

At the time, Best Buy’s strategy was considered a bold and innovative response to customers shifting omnichannel purchasing preferences.

Today, this experience is par for the course, offered by most retailers and widely embraced by consumers.

Meanwhile, customers' buying preferences have become more complicated and multifaceted than ever before. Consumers expect a seamless shopping experience, with options like in-store pickup, same-day delivery, and real-time inventory visibility.

However, revamping an entire supply chain and inventory management system can be complicated and prohibitively expensive. It often requires significant investments in technology, training and logistics infrastructure that may be beyond their reach.

Composable microservices that can run independently or as a composite are the answer. Here are three best practices that can support modern inventory visibility and management demands so retailers can successfully meet customer expectations.

1. Know what problem you’re trying to solve.
   Inventory management is industry and even brand specific. A one-size-fits-all solution will inevitably introduce new complications, inefficiencies and challenges.
   
   For example, grocers require real-time shelf inventory to handle store fulfillment and to account for perishable goods. In contrast, fashion retailers need solutions for managing inventory turns and seasonality to minimize markdowns and remain responsive to quickly changing fashion trends. Finally, store-based fulfillment retailers must prioritize in-store findability and rapid fulfillment so shoppers can find what they want when they want it.
   
   Understanding your business case and inventory priorities will enable you to tailor your inventory management system to meet specific operational needs.
   
   
2. Leverage composable microservices to elevate supply chain management.
   Composable microservices effectively build new capabilities on top of the existing tech stack, allowing retailers to respond more quickly and effectively to consumer demands and the accompanying supply chain and inventory management challenges.
   
   Key composable microservices can include:
   • Inventory Single Source of Truth (SSOT): Establish a centralized supply and demand service for accurate inventory data.
     Available to Promise (ATP): Implement an availability microservice to calculate ATP based on supply, demand, rules, segmentation and safety stock.
   • Audit Services: Invest in comprehensive audit services to identify and resolve discrepancies.
   • Inventory Control Tower: Develop an inventory control tower to detect exceptions, such as overstock and out-of-stock probabilities and take corrective actions.
   • AI/ML Integration: Enhance these services with artificial intelligence and machine learning for real-time decision-making and customer support.
3. Assess outcomes and refine processes.
   When retailers leverage composable microservices to elevate supply chain management, they can expect to increase sales, reduce inventory, improve store-associated productivity, and encounter fewer inventory cancels.
   
   However, consumer preferences aren't stagnant, so retailers will have to remain agile, always evaluating supply chain outcomes and refining their technologies, workflows and processes to account for these changes.
   
   Put differently, supply chain management is never mastered. It’s always being refined, which is good for brands and consumers.
   
   To stay ahead of the curve, measure and assess supply chain and inventory management outcomes and refine processes accordingly.
   
   Keep Composing to Stay Ahead
   Composable microservices allow retailers to remain agile and responsive, addressing consumer expectations and establishing a competitive advantage even as the retail landscape evolves.
   
   Just as Best Buy's BOPIS service was once groundbreaking, today's innovations must continually evolve to maintain their edge. The future of retail relies on leveraging the latest innovative approaches that empower brands to surpass consumer expectations and continually adapt to market demands.
   
   Chap Achen is vice president of product strategy and operations at Nextuple, a firm that helps retailers, grocers and distributors elevate their omnichannel Order Management Systems by using a microservices architecture.