Tag Archives: inventory management

Necessity & Innovation

Nearly everyone we ask says that they want to be innovative — the best returns come to those who are first to market with a new product; those who innovate new and better processes can provide much better quality at much lower costs; those who can create a management system or culture that constantly is clicking on all cylinders can have a powerful advantage.

But how often do they happen, and why?

In our experience and research, we find that innovation is truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.
  • And possibly most relevant during the current pandemic, adversity or “necessity” often brings about innovative solutions.

A recent SupermarketNews article notes that current world challenges have been exceptionally tough for supermarkets, and that the associated difficulties have brought about significant and innovative improvements in how stores are being run… now and possibly in the future!

“The first hint of the virus reaching our communities ignited the shock of an overwhelmed supply chain,” said Randy Evins, Senior Principal and Industry Advisor.

“A couple of weeks later, the consumer experience was further diversified with online pickup services, home delivery and special hours reserved for vulnerable shoppers. Some local grocers have also installed plexiglass protectors around their checkout stations and added floor markers to help ensure shoppers are standing six feet apart while waiting in line.

“There’s unquestionably a lot of ingenuity happening in supermarkets right now. But there is one area of the business that still requires attention — especially if grocers want to continue surviving this constantly evolving time as well as the eventual rebound to come.”

The article goes on to stress the importance of leveraging digital technology to ensure that all variables are considered in “real time” when making inventory management and ordering decisions.

“Digital strategies must go even deeper to cover the entire value chain — addressing the need for connected processes, real-time transactional data and immediate visibility into store-level inventory,” Evins said.

“Supermarkets can no longer afford to order new products and additional inventory blindly. They need to know what is available on their store shelves, store backrooms and distribution centers — by SKU and quantity and in light of forecasted demand.”

In support of this perspective, the article cites predictive data indicating that 25% to 30% of a grocer’s sales volume will consist of digital orders by 2025, compared to 6% to 10% today.

Evins went on to say that the use of technology, as described, will enable store employees to “have the visibility and insight they need to work more efficiently, safely and productively while keeping consumers happy and coming back over and over again.”

Certainly, given today’s circumstances, necessity has truly been the “mother of invention.”

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