As human beings, our experiences not only define us, they substantially shape our relationship with the world. This is particularly true when it comes to brand loyalty and purchasing behaviour. Customer loyalty, satisfaction and purchasing behaviour can be linked to and stimulated by, the emotions a customer connects with a brand, and these emotions can be directly linked to the experiences a customer has. While brand experience has deep roots in marketing, the supply chain has a real impact on where and how a product is presented to a customer. For example, there are few things more likely to derail a purchase than a customer finding the item they are ready to purchase is out of stock, or not available in their preferred size. Factors such as the failure to meet the need for immediate gratification, or interruption of the buyer journey can become a deterrent away from a brand, particularly if such instances reoccur. Expectation and experience are tightly bound to marketing, but it is the supply chain that ultimately ensures product availability and access, and these factors need to work in conjunction to create a brand experience that delights customers and builds lasting relationships.
On a fundamental level, a supply chain’s only purpose is to enable the provision of goods to customers, and therefore an organisation’s reason for holding inventory is unquestionably to deliver to its customers what they want, when they want it, through whichever platform they elect to purchase from. Inventory control, however, is a balancing act demanding that while customer satisfaction remains a priority, inventory levels are kept lean to minimise the amount of working capital invested. Traditionally, product demand followed reasonably predictable cycles, allowing for forward inventory planning; however the speed, pace and innate erratic nature of modern demand is challenging these methods.
As technology continues to shift purchasing patterns, creating an “always-on” marketplace, it is more important than ever to not only managed optimal stock levels to satisfy demand but furthermore, to develop eco-systems that seamlessly communicate stock availability and trigger stock fulfilment to optimal levels. For many years, techniques of demand forecasting have relied on looking back, analysing what has happened and using such information to predict the future. These techniques have operated with varying levels of success, but more and more, the fast-paced nature of change, coupled with considerable shifts in demand patterns are rendering these techniques less accurate. Prescriptive analytics, however, uses advanced algorithms to not only predict what could happen but offer advice on what organisations should do regarding, amongst others satisfying fluctuating demand patterns. In a technology-enabled world data already effectively matches the right item to the right customer, but is also starting to predict what types of products the customer is likely to buy, and when. From an inventory perspective, such predictability allows for smart order fulfilment and stock levels thereby improving both the ability to deliver and manage financial obligations of the organisation.
The ability to almost intuitively fulfil consumer demand will soon become a competitive advantage over those organisations lacking similar supply chain competencies. Inventory management is integral to the ability to service customers, and therefore to ultimately drive customer satisfaction. It is only through collaborative partnerships between IT, operations, supply chain partners and suppliers that smart inventory orchestration can be achieved to unlock advantage and gain market share from increasingly complex customers.
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