MINI PROJECT REPORT

ON

“Inventory Control”

Towards partial fulfillment of

Master of Business Administration (MBA)
(Affiliated to DR. A P J Abdul Kalam Technical University, Lucknow)

Submitted By: Submitted To:

Ambrish Kumar Pandey Dr. Shivangee Tiwari
Roll No. 2100540700017 (Assistant Professor)
MBA 1st Semester BBD ITM, Lucknow

SESSION 2021-2022
DEPARTMENT OF MANAGEMENT

Babu Banarasi Das

Institute of Technology & Management
Sector 1, Akhilesh Das nagar, Faizabad Road, Lucknow (U. P.), India
 DECLARATION

I hereby declare that the field work entitled of “INVENTORY CONTROL”

submitted to the university is a record of an original work done by me under the

guidance of Dr. Shivangee Tiwari (Assistant Professor) (BBD ITM, Lucknow) and

this Mini report is submitted in the partial fulfillment of Master in Business

Administration.

Date: Ambrish Kumar Pandey

Place: MBA 1st Semester
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to our H.O.D. Dr. Meetu

Pandey who gave me the golden opportunity to do this wonderful opportunity to pen

down a innovative business plan and also helped me in doing a lot of Research and I

came to know about so many new things I am really thankful to her.

I am highly indebted to my Faculty guide DR. SHIVANGEE TIWARI Ma’am for

their throughout guidance and constant supervision as well as for providing necessary

information regarding the project & also for their support in completing the project.

I would like to express my gratitude towards my parents & my college mates for their

kind co-operation and encouragement which help me in completion of this project.

However, it would not have been possible without the kind support and help of many

individuals and organizations. I would like to extend my sincere thanks to all of them

who have willingly helped me out with their abilities.

Ambrish Kumar Pandey

MBA 1st Semester

 PREFACE

I respect to the allotted project, I have inherited myself as an entrepreneur in this

organization but informally it is a sacred place for me as it’s my first practical

exposure to an organization to know and get aware to an organizational real practical

stressful environment. Although I am student of MBA It is a two year full time degree

courses. So far this training is scheduled for first semester syllabi of AKTU i.e. (Mini

Project) as a separate topic to be asked in detail in viva-voice conducted by external

Thus study will provided me a better opportunity to survive in cut throat competition

with a prosperous existence. I have tried my best to gain out of well framed

circumstances & with the help of experienced personnel who helped me out so for

become possible to them. As being a very confidential functioning many things are

there which can’t be known but on the basis of gathered information and certain hints,

the project has been formed. It may have something missing but I have tried to present

all things what I have received. Although this report has been got checked by different

personnel but after that if there is some shortcomings I expect it to be rectified. So the

whole study bifurcated in different parts. Certain observations & suggestions also

have been stated which if possible to be reviewed.

 TABLE OF CONTENT

Sr. No. Topic Page no.

1. Introduction

2. Objective of innovation

3. Need of innovation

4. Source of idea

5. Uses of the service functional areas of services

6. Competitors analysis SWOT analysis of service

7. Technical feasibility

8. Market analysis

9. Costing and pricing of the service

10. Financial feasibility or available sources of funds

11. Limitations

12. Future changes

13. Conclusion

14. Bibliography
 INTRODUCTION
If you need to keep track of your stock of any kind of items - this application can help

you to do it.

It can be used as a stock management tool or inventory tracker at home or in a

warehouse. A small shop can use it for sales and purchases management.

Even big companies use it mostly as a data collection terminal to exchange with back-

office through Excel files import and export.

Inventory management is all about having the right items on hand at the right time to

meet customer demand while controlling costs and minimizing waste and loss.

Companies with best-in-class inventory management practices don’t guess how much

stock to buy, and they keep a steady flow of raw materials, work-in-progress items

and finished goods moving from manufacturing to consumer, over a variety of

distribution channels.

But no one stays best in class by resting on their laurels. Companies need to stay on

top of trends in inventory management, understand the drivers behind them and

determine whether it makes sense to be an early adopter — or let someone else work

out the bugs.

What Is Inventory Management?

Inventory management is the process of acquiring, storing and selling or using the

four main types of inventory: raw materials; works in progress (WIP); finished goods;

and maintenance, repair and operations (MRO) stock.

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4 Main Inventory Types Explained

Raw materials: This category includes both nonperishable materials, such as sand,

wood or wool, or raw fruits, vegetables, grains or meats used to make processed

foods.

Work in progress: WIP are goods that are in progress but not yet ready to sell, such

as sheets of glass, window frames, fabric or flour.

Finished goods: Finished goods are ready-to-sell items, such as a window, suit coat

or loaf of bread. Finished goods may be either intermediate items headed for another

manufacturer, such as fabric to a clothing maker or bread to a sandwich shop, or a

consumer good destined for a retailer or direct-to-consumer (D2C) sale.

Maintenance, repair and operations: MRO items are items needed to keep the

production line up and running, like tools or spare parts, or consumables to get

products to their destinations, like paint or packaging.

All companies — and especially those in inventory-intensive industries, such as

manufacturing, retail and food service — must avoid tying up more cash in inventory

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than necessary while minimizing waste and shrinkage. Successful companies

accomplish this using inventory models.

What is the importance of inventory models in managing inventory?

An inventory model is the system a business uses to determine the optimal way to

produce its goods. The inventory model or models in use govern areas including, but

not limited to, how frequently to order raw materials or MRO stock with the goal of

not having too much or too little on hand, deciding how best to track and store items

awaiting production or transit and how to fill customer orders quicky and with high

accuracy. Factors when selecting a model include the industry, any special

considerations around the production lifecycle and which model leaders think will

best maximize the investment in goods and raw materials.

Understanding inventory models will help businesses maximize resources, manage

costs and deliver quality goods to customers on time and is first step in effective

inventory management. That's because each model has a specific technique to help

leaders determine how much stock to have on hand. For instance, companies with

more complex manufacturing and supply chain processes use methods such as just-in-

time (JIT) and materials requirement planning (MRP) to balance inventory. Popular

models like economic order quantity (EOQ), economic production quantity (EPQ)

and days sales of inventory (DSI) are also useful.

While smaller businesses tend to track inventory manually using spreadsheets, larger

corporations benefit from using either specialized enterprise resource planning (ERP)

software or a specialized inventory management application.

Once a company has settled on a model, it’s time to seek a competitive advantage.

And that requires some out-of-the-box thinking, advanced planning and leveraging

advances in technology and process.

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Top 14 Inventory Management Trends

Keeping abreast of the latest trends in inventory management is essential no matter

what business you’re in. Many of these trends are focused on helping companies

assess where to invest resources, while others will get you more buy-in from

stakeholders, better use of data and a roadmap to growth.

Some are pretty cool, too.

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1. AGVs and AMRs

Customers are demanding ever-faster deliveries, so businesses are increasingly

looking for ways to work more efficiently. Automated guided vehicles (AGVs) and

automated mobile robots (AMRs) are tools to help warehouse operators collect

products from decks and pallets. While AGVs have been around for a while, AMRs

are newer on the block.

AGVs rely on magnetic strips or wires to follow fixed paths through a warehouse,

meaning that they aren’t great fits for facilities that change their floorplans or have a

lot of people moving around. AMRs are among a new class of ―collaborative robots,‖

and they don't need to rely on fixed routes to navigate a space because they include

smart sensors, like those used in self-driving vehicles. They can even be ―paired‖ with

a human worker.

Both types of vehicles reduce the time it takes to move items around the warehouse

and free up human staff for other tasks to help fulfill orders faster. Because AMRs

don’t require additional investments in infrastructure, such as the wires to guide

AGVs, they can be more cost effective than you might think and relatively easy to put

to work.

2. Artificial intelligence

When it comes to warehouses and inventory management, systems with artificial

intelligence (AI) and machine learning (ML) capabilities work hand-in-hand with

those IIoT initiatives. The problem is that a lot of the data manufacturers and retailers

collect now isn’t structured to fit neatly in a spreadsheet: Think product images,

videos shot as those AMRs move around warehouses, various SKU formats and the

data produced by all manner of sensors and scanners. Machine learning could be

employed to spot out defective products or packaging so that customers only get

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 quality items. And, the nature of inventory means that your data set is continuously

growing and changing. All that makes it difficult to analyze.

3. Cloud-based solutions

The ability to track inventory in real-time can be a game-changer for any business.

Because cloud-based solutions allow all of your company’s data to be stored securely

and centrally and accessed from anywhere, decision-makers can more quickly

respond to and solve inventory issues. And, cloud, like software as a service, delivers

other benefits over on-premises applications: Lower upfront costs since there’s no

hardware to buy, faster implementation, consistently up-to-date software and better

security and resilience than most organizations can build on their own.

From an inventory management perspective, situating data in a central location

simplifies adding new warehouse locations, even doing pop-up fulfillment centers in

stores. Centralization enables a GPS location project, where you track on-the-move

pallets, containers or delivery vehicles in real time to predict when items will arrive at

their destinations. That data can then be mined to find the reasons for recurring

delays.

Any cloud-based inventory management software you choose, whether SaaS/cloud or

on-premises, should integrate with your finance and accounting and order

management systems and allow for granular tracking of inventory down to the SKU

or barcode, whether items are in a warehouse or in transit.

4. Distributed inventory management

Distributing inventory across multiple warehouses can reduce transportation costs and

speed up delivery times — if you can put the right products in the right places and

consistently dispatch items from the warehouse closest to the customer.

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 Success requires data analysis to see where orders are coming from versus where

stock is located, the flexibility to set up distribution centers in the right sites based on

data and the technology to direct suppliers to properly split up shipments.

In most cases, when a company is managing more, smaller warehouses versus a few

huge locations, it can more tightly manage inventory.

5. Predictive picking

Again, this trend depends on data analysis — in this case, using unstructured data to

predict behavior by recognizing interdependencies and patterns. Predictive picking

software can direct businesses to initiate fulfillments before an order has even been

placed. Success depends on compiling data, such as planned marketing campaigns,

weather and seasonality to predict customer orders with a high degree of accuracy.

If that sounds complicated, it is. Success at scale requires a lot of data and powerful

analytics tools. But most manufacturers and retailers can start down the predictive

path by analyzing historical data to spot demand surges for specific products, beyond

the obvious like candy in late October or pool chemicals in May. Then, they can use

human intelligence to figure out why there was a spike and whether it’s likely to

recur. If so, the company can have enough stock on hand and design a fulfillment

process that minimizes shipping times and touches. And that data can itself eventually

feed into a predictive picking program.

6. Success Strategies for Trend Adoption

Which trends make sense for your business? That depends on your company's

strategic objectives, budget, size and appetite for technology. Here are some points to

consider when evaluating a trend. Weigh the cost/benefit against other long-,

medium- and short-term projects on the table, and ensure there is an executive

sponsor who can define the plan's success.

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Warehouse Project Cost/Benefit Analysis Template

Proposed project

Executive sponsor

Locations/departments affected

Budget

Who will implement: Staff or contractor?

Costs, estimate

Equipment, capital

Licensing, software/storage etc.

Training

IT staff or contractor

Ongoing support costs, misc.

Benefit examples, attach rating or $ savings

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 Improved inventory accuracy

Reduced carrying costs

Fewer stockouts

Less dead stock

Hard cost savings (itemize)

Rate validity of the business case

Rate overall viability of the project

7. Personalization

Personalization in inventory management is about a deep understanding of customers'

buying habits, so you can stock and suggest relevant products and ensure a seamless

experience based on past behavior. A robust inventory management system allows

companies to tap into personalization data to boost sales. For example, a retailer may

suggest additional products to customers browsing online or reaching check out, while

a manufacturer could begin to stock complementary items, such as maintenance kits

for the machinery it produces.

Sources of personalization data include:

 Demographic/persona data for individuals, such as job title or location.

 Company data points, such as employee count, revenue and industry.

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 Behavioral data gleaned from your website or a customer’s order history: first-time

vs. repeat buyer, content consumed, changes in buying quantity or SKU diversity.

 Contextual data such as time of day, week or month customer visits your site or

whether an order is initiated from a mobile device or desktop.

8. Creative financing

Especially for new manufacturers, using creative financing to pay for inventory can

deliver a competitive edge.

On the smaller side, think about sites like Kickstarter that enable ―pre-tail‖ sales,

where a maker can rack up retail revenue before the product is produced. These sales

can fund purchases of raw materials and manufacturing capacity.

Larger manufacturers might look beyond a typical inventory loan, where the

inventory itself is the collateral. Before looking for new financing, see if you

can reduce your invoice carrying costs. AR loans or factoring, also called invoice

factoring, entails either borrowing against your accounts receivables or selling your

outstanding AR to a ―factor,‖ which pays your company a percentage of the total

value of those invoices, often 70% to 90%.

Companies with stock that’s not moving may also take steps to boost liquidity,

including converting stale inventory to cash by offering appealing discounts or by

bundling less popular items with strong sellers. Or, consider more flexible rental

options instead of the traditional own or lease model — there are significant

advantages to adding a subscription model or recurring revenue source to your

business.

9. Automation

Automation is where companies set up workflow rules to trigger specific actions

without human intervention, or with very minimal involvement. By automating rote

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 tasks, you free up employees to focus on more valuable projects, including those that

promote growth and product quality improvement.

For example, retail automation can include automatically updating stock counts when

an order is processed through your sales platforms. You won’t be at risk of

overselling, and the customer doesn’t have to wait to confirm an order. Other

examples include automating SKU mapping, order fetching, updating real-time

shipping rates and reorder notifications.

Warehouse automation is a specific discipline focused on moving inventory into,

around and out of warehouses with minimal human involvement. It takes a dual focus

on digital and physical processes. At a basic level, warehouse automation merges

machine learning, robotics and data analytics. An example is a warehouse

management system gathering information on the number of a given SKU that will

ship in the next 24 hours and directing a worker to pick those items all at once to

avoid repeat trips. More advanced warehouse automation could use AI, cameras and

sensors to help an AMR navigate a warehouse and compile an order without human

help.

Moving toward real-time analytics is a popular way for retailers to enable

personalization, monitor changes in supply costs to recalculate stock levels and

identify which suppliers aren’t up to the company’s standards.

10. 3PL

Third-party logistics, or 3PL, is where distribution and warehousing or other activity

is outsourced to a third party. These services may help businesses reach more

customers or operate more efficiently without incurring the costs that come with

infrastructure development. Businesses have the option of outsourcing an entire

logistics process or select operations. The key to success with 3PL is to connect all

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 production sites, including the manufacturer and 3PL provider, such that they operate

as a cohesive supply chain.

More ecommerce means that returns, aka the reverse supply chain, represent a

growing drain on profits. Contracting with a 3PL for returns handing could reduce

costs because these firms tend to deliver economies of scale, including better rates

with carriers, and processes tuned to execute returns as inexpensively and efficiently

as possible.

11. Hybrid warehousing & shipping

A hybrid warehouse combines multiple activities, some typical — storage, picking,

shipping — and some not as common, as is the case when, for example, the line

between retail location and warehouse blurs. For example, some big box stores have

converted unused space to drop-ship locations. While this uses space efficiently, retail

employees may need to be retrained.

We’ve also seen retailers partner with those 3PLs to store inventory and ship orders

directly to end customers, adding a hybrid layer to traditional warehousing and

shipping. Drop shipping, where a retailer never takes possession of stock but pays a

manufacturer to send items direct to customers, can also have a hybrid flavor when a

retailer chooses to stock a small number of popular drop-shipped items so it can offer

premium shipping options. A creative approach to warehouse management means that

businesses can offer those extra SKUs and lower their costs.

12. Omni-channel inventory control

It seems simple: Align your channels so that a customer can look online to see

whether a given item is available in a nearby physical location, make the purchase

then walk into the store and pick up the item. Oh, and make sure the cost of the item

on the shelf is the same as what the buyer paid.

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 In reality, omni-channel inventory control requires coordination among store,

distribution center and ecommerce operations to reconcile physical and online

inventory and ensure price and discount or sale parity. A customer who purchases an

item for $50 online, picks it up then decides to walk around the store and sees the

same item on sale for $39.99 is likely to get right back in line for a price adjustment,

and not cheerfully.

Still, to remain competitive, an omni-channel strategy is a must. To succeed,

businesses need to make sure they have a connected supply chain, a near-real-time

inventory reconciliation process to provide visibility, advanced demand planning,

highly accurate order fulfillment, data analytics and tracking and distribution centers

close to where customers are.

13. Blockchain

Most people think of blockchain as the underpinning for digital currencies like

Bitcoin. But that’s just the beginning. A blockchain is simply a database that stores

transactional data. Transactions, once created, cannot be modified, and a distributed

ledger allows transparency, either to anyone or members of a private consortium.

There are a number of examples of companies using blockchain for inventory

management and control. Deloitte insists that 2020 marked the start of the blockchain

decade and cites some innovative use cases that illustrate the possibilities, like firms

using blockchain to secure AP loans. The top industry using blockchain now is life

sciences and healthcare, often for clinical trials and to digitize health records. In the

supply chain, Walmart and Nestle are among the food retailers that use the IBM Food

Trust blockchain to remove uncertainty around food safety and freshness and add

efficiencies across the supply chain to minimize waste.

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 Companies looking to use blockchain to provide certainty and insight into their supply

chains will likely need to sign on with a consortium that works within their industries.

Deloitte recommends selecting a consortium that is transparent about governance,

takes an egalitarian approach to participants and has broad adoption within your

market.

14. Reporting & analytics

A common thread with many of these trends is use of real-time data analytics to make

decisions, create a more customer-centric business model and minimize costs while

boosting efficiency.

From an inventory perspective, becoming more data-driven allows businesses to make

better demand forecasts, move toward just-in-time inventory replenishment and get

and provide near-real-time updates on where supplies or shipments are and when

they'll arrive at their destinations.

It's not enough to have access to large amounts of data, though. Businesses need to

view it as a resource and use it to stay competitive. Best practices to become more

data driven include:

1. Collect data even if you’re not sure how you’ll use it now. Whether sensor

data from IoT devices or images from a warehouse robot fleet, the more inputs you

provide, the more accurate your eventual predictive analytics and reporting become.

2. Opt for interconnected software and data sources. Siloes are bad for

analytics, so look for systems that can interconnect with your finance and accounting,

ERP, order and customer management and other core software. Custom integrations

are expensive.

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3. Insist that decisions are based on data, with reports to back up assertions.

Select the metrics, like logistics KPIs or supply chain KPIs, that matter to your

company, and track them consistently.

All product companies can benefit from a deep dive into inventory management and

controls.

4. Take action based on insights. Teams that work to analyze data and issue

reports but never see any movement based on their efforts will become discouraged.

For manufacturers, even rudimentary data analytics can reveal suppliers that often fall

short on quality or timeliness, production bottlenecks or inefficient warehouse

layouts. Add some machine learning and you can start taking predictive actions.

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 OBJECTIVE OF THE INNOVATION

My primary objective as an Inventory Control app is to deliver quality services

and awareness to the customers. I can fulfill this by ensuring those customers’

requests on quality product.

I aim to provide customers better quality services at their local area.

To promote LOCAL FOR VOCAL

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 NEED OF INNOVATION
Your goods are incredibly valuable. You can’t just acquire inventory. You have to

safeguard, store, and manage it. All of these activities cost money.

The cost is especially steep if you manage your inventory poorly. 50% of US retail

decision makers say inventory misjudgments kept them from more full-price sales. It

comes as no surprise then that supply chain managers are especially hungry for cost-

saving innovations in inventory management.

As global supply chains and rising customer expectations add strain to supply chains,

innovation, in areas like inventory management, will swoop in to save the day. That

said, business owners must pay attention to these inventory management trends.

Snooze on these trends and you may wake up to find your competitors thriving with

better processes and lower operating costs.

Of course, staying aware of inventory management trends takes more than a little light

reading. You must understand the drivers behind these trends.Then consider how

prepared your company is to take advantage of exciting new tools.

An enterprise with ―unclean‖ data, for example, can’t take use fancy data analytics

tools the way a competitor with excellent data hygiene practices can. Staying on top

of inventory management trends is a continuous learning exercise.

Building Your Technology Roadmap

Every business can innovate, but not every business starts innovating the right away.

Some lack the pre-conditions for success (e.g. data hygiene, digitization), the talent,

or the buy-in from stakeholders. At times, it’s the age old issue of a tight budget.

Does this mean managers should throw up their hands and hope for the best?

Certainly not. On the contrary, keeping an eye on inventory management trends

becomes more urgent. If you’re going to build your technology roadmap, you’ll need

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a clear picture of the current landscape to assess where to invest your limited

resources.

A technology roadmap is a strategic planning tool. It documents your desired future

state and the technology, talent, people, and processes you’ll need to get there. In

order to create a technology roadmap, you’ll need to:

1. Define your company’s vision and strategic objectives: Without an

understanding of your strategic objectives (e.g. to save money by X amount, to

eliminate X percent of manual processes, to be the leader in digital supply

chain management) it’ll prove difficult to determine which trends to apply to

your business.

2. Consider multiple horizons: A technology roadmap should focus on the

short-, medium-, and long-term. Focus too much on the short term and you

risk future obsolescence. Focus too much on the long term, and you’ll reduce

the profits that fund future projects. Look ahead and think about what

processes and technology will be a fundamental part of your industry in 10,

20, or 30 years.

3. Conduct a needs assessment and gap analysis: Where do inefficiencies

currently exist in your business? Which processes or pieces of technology are

long overdue for an upgrade? What functional limitations currently hinder

your business success? Asking these questions will help you prioritize your

activities and build a useful roadmap that secures buy in from various

stakeholders.

4. Calculate the cost: It’s important to detail the anticipated capital requirements

for such projects, so that you can plan accordingly.

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 5. Set timelines for short-, medium-, and long-term projects: In order to go

from strategy to execution, make your roadmap’s initiatives time bound.

6. Make someone accountable for the roadmap’s success: Whether it’s an

executive or a dedicated committee, it’s important to give someone

responsibility for the roadmap’s success. If no one’s accountable, these

innovation projects will fall on the backburner while everyone focuses on their

business-as-usual core tasks.

Our 7 Top Inventory Management Trends

Trend 1: Predictive Picking and Human Study Using Artificial Intelligence

Imagine a warehouse that picks products before customers even hit ―buy‖. According

to some companies, this is entirely possible. Thanks to artificial intelligence,

advanced systems use unstructured data to recognize patterns and interdepencies and

predict behavior. They can effectively initiate the order fulfillment process before the

order’s even made.

Today, variables like weather, season, and marketing campaigns can determine what’s

being called ―near perfect forecasts‖ of customer orders.

The application of AI to inventory management goes beyond making predictions. In

some cases, AI is helping warehouse robotics learn to physically navigate warehouses

like humans. Many tasks are simply too ―human‖ for robots to mimic.

Ocado, a British online supermarket, uses robots to navigate its warehouses and

manage its inventory with surprising efficiency. However, there are some products,

like oranges, that prove too difficult for its machinery to handle.

Even the most aggressive human understands the amount of pressure required to hold

an orange without turning it to juice. A robot doesn’t. To address this, one startup

builds robots that uses AI to watch and learn from human order pickers.

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 Evidently, there’s a lot of experimentation concerning AI. Should any warehouse

operator dump all their money into AI technology? No. But it’s certainly worthwhile

to pay attention to advancements and assess which innovations – such as a savvy

orange picking robot – are most useful to your business.

Trend 2: Focus on Omnichannel Inventory Management Solutions

An omnichannel retail business poses new challenges. In a brick-and-mortar

environment, the immediacy of the exchange makes inventory management simple.

The customer leaves with the item. Therefore, the product is instantly in their

ownership and subtracted from your inventory.

On the other hand, online shopping introduces a delay. Sure, when a customer

purchases an item online, it’s technically theirs.For all intents and purposes though,

the item is still part of your inventory and therefore tying up capital.

A successful inventory set-up in an omnichannel retail environment requires the

following features:

 Regular inventory reconciliation exercises: Without a rigorous inventory

management process, it’s easy to get inaccurate numbers. For instance, failing to

account for online sales may inflate your count and lead to stockouts.

 Multiple distribution centers: An omnichannel retail environment offers more

opportunities for customers to find your products. Fulfilling this can be a challenge.

Adding a distribution center closer to your customers shortens your fulfillment times

and reduces your shipping costs. Moreover, you can easily address stockouts by

topping up with inventory from your other distribution center.Advanced warehouse

management software use order routing and shipment automation rules to decide

which warehouse to fulfill order in a multi-warehouse management environment.

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 Connected systems that provide a “single source of truth”: With inventory spread

across multiple locations and sales conducted in-store, online, and via mobile,

conflicting data becomes an issue. Which numbers should you trust? An integrated

warehouse management, inventory management, and point of sale solution helps

ensure you have one set of accurate numbers.

As omnichannel retail increases in importance, retailers and warehouses will have to

focus on developing inventory management process that can keep up.

Trend 3: Nimble Inventory Solutions for Experiential Shopping

The customer experience as we know it is changing. Today, consumers browse online

for goods and services from the comfort of their bed. Convincing people to get up, get

dressed, and get down to a shopping mall takes a lot more than the promise of a new

outfit.

In response to this shift, brands are shifting to ―experiential‖ retail. They want to turn

shopping into an experience much like going to the movies or eating at a restaurant.

To meet this objective, they open ―concept stores‖ designed to draw customers in and

introduce them to their product.

These companies accept the fact that U.S. consumers spend over $500 billion a year

with online merchants, so they’ve chosen to reimagine the purpose of their brick-and-

mortar shops.

This presents new inventory management questions for brands. Should they go the

way of Bonobos, the online men’s retailer which only stocks one of each item and

delivers purchases to customers?

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 Or should they take ModCloth’s approach to a women’s fashion concept store and

keep a few of its most popular items in store for customers who want to go home with

their purchase on the same day?

The retail industry’s move towards experiential retail is an important trend for brands,

retailers, and warehouses to study.

Trend 4: Increasing Personalization and Its Impact on Inventory Control

Ecommerce personalization extends far beyond knowing your customer’s name. It’s

about knowing your customer’s buying habits, helping them find new products, and

creating a seamless user experience based on their prior activity.

Amazon implemented this to tremendous success. According to one McKinsey report,

the recommendation algorithm accounts for 35% of the online retailer’s sales. Brands

that use customer information to suggest additional products can significantly boost

their sales.

Of course, this requires a suitable inventory management system. Determining

inventory levels is already a difficult balancing act between preventing stock outs and

reducing carrying costs by defining safety stock quantity, inventory reorder points,

inventory turnover ratio, and inventory ABC analysis . Throw in a new variable like a

recommendation engine and the process becomes even more complicated.

Real-time or streaming analytics is one way for retailers to facilitate this shift towards

personalization. It also helps companies who design product data

management strategies around online customer conversations about their brand.

By using advanced streaming analytics tools, brands accomplish more than

just accurate demand forecasting and stock replenishment. They can also:

 Obtain greater visibility over where raw, semi-completed, and completed goods exist

in their supply chain

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 Monitor fluctuations in supply costs and recalculate stock levels accordingly

 Minimize inventory costs by identifying which suppliers routinely fall short of their

service level agreements

Personalization drives sales, increases brand loyalty, and elevates the customer

experience. That said, this strategy only works if you can deliver on said goods once

you acquire those customers.

Trend 5: The Sophistication of the Inventory Manager’s Skill Set

As inventory management grows increasingly sophisticated, so too will the skills

required to oversee it. Companies are quickly eliminating manual processes and

introducing software to reduce their reliance on spreadsheets. As a result, it’ll be up to

inventory professionals to understand how to use these new tools.

In addition, inventory managers will need a working knowledge of important concepts

in order to stay up to date on evolving trends and technology. Warehouses and

retailers are moving towards artificial intelligence to manage demand

forecast, automation to pick stock, and RFID scanners to gain visibility over

inventory.

Supply chain professionals must know how all of these elements work together to

meet business objectives.

Trend 6: Creative Financing Agreements Between Vendors and Customers

Innovation is expensive, but it’s unavoidable if companies wish to remain

competitive. With this in mind, warehouse management software providers and

machinery suppliers are working with customers to develop creative financing

options. In some cases, these supplier partners move away from the traditional own or

lease model to provide more flexible rental options.

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In fact, some software providers are taking a proactive approach by forming strategic

partnerships with the hardware companies that use their software.

By working together, they come up with cost saving opportunities that they can pass

on to the end user, thereby acquiring more customers.

In the inventory management world, where there are endless solutions managers can

adopt, from RFID tags and scanners to pick-to-light functionality, these financing

options provide businesses with a cost effective way to execute on their strategic

warehousing technology roadmap.

Trend 7: Streamlined Management of Returned Inventory

Consumers return roughly 20-30% of the goods they buy online while they only

return 8.89% of goods bought at brick-and-mortar stores. Add this to the rising

popularity of online shopping and the increasing number of individual packages rather

than bulk packages, and you have a growing inventory management nightmare.

There’s no getting around this reality. About 49%of retailers provide free return

shipping. If consumers see that you don’t offer this, 79% say they won’t bother

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shopping through your online store at all. With this in mind, how can retailers manage

the increasing influx of return orders?

A robust WMS System helps handle this. Keep in mind that your WMS needs to do

more than just help workers pick, pack, and ship. The WMS must also help

you manage returned inventory accordingly.

For example, an undamaged returned product should move back into inventory where

it can be sold to someone else. The right return policy with the help of the right

software tracks these movements accordingly.

Successful Retailers Pay Attention to Inventory Management Trends

Excellent inventory management keeps your costs low, your margins high, and your

goods protected. Of course, your inventory processes must meet current trends in

consumer preference. As retail moves from single-channel to omni-channel, shopping

becomes an immersive experience. The way you handle your inventory must change

as well.

By studying new concepts, tuning in to emerging trends, and understanding new

technologies, your company can readily adopt the right warehouse and inventory

management solutions or 3PL Solution to get your goods from the warehouse to your

customers.

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 SOURCE OF IDEA

Human mind:- Human mind is the main source of innovations. In

business, innovation often results when ideas are applied by the company in order to

further satisfy the needs and expectations of the customer

• Unexpected Occurrences:- Consider, first, the easiest and simplest source of

innovation opportunity: the unexpected....

• Incongruities....

• Process Needs....

• Industry and Market Changes....

• Demographic Changes....

• Changes in Perception....

• New Knowledge.

• Innovation is based upon bright ideas. The human mind thinks of new things

that can better fulfill an existing need. In this process he thinks of filling his needs in

new ways and by devising new products and mechanisms. Demographics: Our

lifestyles can also be a source of innovation

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 ADVANTAGES
1. Higher Productivity

An organized and systematic inventory management process means more gets done in

less time. Using software to manage inventory will cut down on time it takes to

process, audit, and track your merchandise. With one interface, you can check the

stock amounts on all your inventory, track what’s selling and what’s not, find vendor

information, and connect to payment apps for invoicing and purchase orders.

2. Better Profitability

Gain business insights with inventory tracking software to see what goods are popular

this period and what goods can go next period. With an eye on the inventory and

tracking reports illustrating what is selling well or poorly- investing more in the stock

that sells means more significant profit for your business.

Successful inventory management means knowing and using that knowledge to get

the most out of the market and merchandise. Inventory software provides you with

this information to make decisions that will net you a higher income.

3. Easy Inventory Processing

Streamline inventory processing by tracking stock and inventory numbers and

associated costs, using inventory management software to save time. With clear

visibility of the stock movement, you’ll always know the status of your inventory for

good inventory management practices.

Inventory tracking automatically updates the quantities on hand when buying and

selling products in real-time for quicker processing and selling times. The software

can also help companies with over or understocking ensuring there is never too much

inventory to move.

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4. Reduces Aged Inventory and Deadstock

Sort your inventory by date to know which orders have come in first, and check the

quantity on hand to determine how much you need to sell. Knowing what goods are

going out of date soon, especially for perishable inventories, means selling aged

inventory before it becomes deadstock and loses your company money. Keeping up to

date on out-of-date products will help your business reduce wastage and repurpose

ageing inventory to save money. Dealing with such stock before it goes bad is one of

the many advantages of inventory management.

5. Automate Manual Inventory Tasks

The right software can automate inventory management systems for your business to

increase count accuracy and revenue while decreasing human error and costly

mistakes. Your employees won’t have to waste time counting and recounting stock

when automated software provides you with real-time information.

No need to run to the back to check and count specific stock levels. Instead, flip open

your phone or check your tablet screen and quickly reference accurate and precise

information—gain calculations and expense tracking without human error for fast and

precise number crunching and quantity counting.

6. Better Customer Service

Providing customers with what they want, when they want it, is a massive part of

customer satisfaction. Your business can keep the popular stock in store thanks to the

automatic low stock alerts inventory software will send directly to your phone. View

the quantities on hand and quickly order more with all your vendor information in one

spot.

Keeping sought-after products in stock and on the shelves can also turn one-time

buyers into loyal customers. They know you’ll have what they need, and that makes

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them appreciative of your services, returning, again and again, to buy from your

business. Therefore, inventory management software can help you retain customers

and produce new ones.

7. Lessens the Chance of Stock-Outs

Inventory control software helps businesses prepare for various events, such as a

stock-out, that affect the supply and demand of your goods. A stock-out happens

when there is an unexpected demand for a specific stock, causing the product to sell

out. Using inventory tracking software can help your business prepare for these

eventualities.

Low stock alerts, real-time inventory valuation, and automatic quantity updates are all

features that will help you adjust to the supply and demand of the market and your

customers.

8. Accurate Expense Tracking

Expense tracking is an integral part of any department within a business, and

inventory is no exception. Inventory software can run reports to calculate the total

sales, total taxes, and other pertinent financial information, like real-time inventory

valuation, to help you keep track of your inventory costs and revenue.

These inventory and expense reports will hold your business in good stead when it

comes to the auditing and accounting aspects of your inventory. Cross-reference your

stock with your financial information to ensure the two line up accordingly when it

comes time for your next inventory audit. Get the most money out of the least amount

of inventory.

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 COMPETITORS ANALYSIS

1. Determine who your competitors are.

2. Determine what products your competitors offer.

3. Research your competitor’s sales tactics and results.

4. Take a look at your competitors' pricing, as well as any perks they offer.

5. Ensure you're meeting competitive shipping costs

There is no competition in the market

because it is a very new service which has
its own value and has no other alternatives

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 SWOT analysis — strengths, weaknesses,

opportunities, threats —
It is something many MBA students learn. Unfortunately, businesses frequently treat

SWOT analysis like geometry — one of those things you have to learn but will never

use again. But SWOT analysis offers a concrete, real-world audit of a company and a

scan of its relative standing within an industry.

While strengths and weaknesses are internal, they are measured on a comparative

benchmark. Opportunities and threats are external — your opportunity is usually at

the expense of another company in your industry. Likewise, threats come from the

competition. Therefore monitoring your competition on an ongoing basis is a

necessity.

STRENGTH:- No Competitors

WEEKNESS:- Not Much Knowledge about the Current scenario.

OPPORTUNITIES:- Can float nationwide if excels in small scale .

THREATS:-As its startup high risk as well as high capital required.

CONCLUSION OF SWOT ANALYSIS

Using SWOT analysis on a regular basis, perhaps once or twice a year, will give you a

broad overview of ecommerce industry trends, show you where you stand in relation

to your competitors, and provide insights into mitigating your weaknesses and

building on your strengths.

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 TECHNICAL FEASIBILITY

A technical feasibility study assesses the details of how you intend to deliver a

product or service to customers. Think materials, labor, transportation, where your

business will be located, and the technology that will be necessary to bring all this

together. It's the logistical or tactical plan of how your business will produce, store,

deliver, and track its products or services.

A technical feasibility study is an excellent tool for both troubleshooting and long-

term planning. It can serve as a flowchart of how your products and services evolve

and move through your business to physically reach your market.

It's the logistical or tactical plan of how your business will produce, store, deliver, and

track its products or services.

Yes it is technically possible by analyzing through (PESTEL)

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 MARKET ANALYSIS

A market analysis is a quantitative and qualitative assessment of a market. It looks

into the size of the market both in volume and in value, the various customer

segments and buying patterns, the competition, and the economic environment in

terms of barriers to entry and regulation.

How to do a market analysis?

The objectives of the market analysis section of a business plan are to show to

investors that:

• you know your market

• the market is large enough to build a sustainable business In order to do that I

recommend the following plan:

Demographics and Segmentation Target Market

Market Need Competition Barriers to Entry Regulation

Segmentation helps marketers to be more efficient in terms of time, money and other

resources. Market segmentation allows companies to learn about their customers.

They gain a better understanding of customer's needs and wants and therefore can

tailor campaigns to customer segments most likely to purchase products.

One technique used to identify a target market is market segmentation. The five basic

forms of segmentation are demographic (population

statistics), geographic (location), psychographic (personality or lifestyle), benefit

(product features), and volume (amount purchased).

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 POSITIONING OF THE BUSINESS IN MARKET

Positioning is a marketing concept that outlines what a business should do to market

its product or service to its customers. In positioning, the marketing department
creates an image for the product based on its intended audience.

This is created through the use of promotion, price, place and product.

There are five main strategies upon which businesses can base their positioning.
• Positioning based on product characteristics....
• Positioning based on price....
• Positioning based on quality or luxury....
• Positioning based on product use or application....
Positioning based on competition. Types of positioning in marketing

• Pricing. Pricing is an essential factor that impacts the decisions of most

customers...
• Quality. Quality can help rebuff most pricing wars....
• Differentiation....
• Convenience....
• Customer service....
• User group....
• Create a strong competitive position....
• Improve sales.

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 COSTING AND PRICING OF THE SERVICE

Many service-based businesses struggle to come up with a fair and profitable pricing

strategy. Unlike product pricing, you can’t exactly quantify all the costs that go into

providing a service.

The expenses that go into providing a service are more subjective than the expenses

that go into making a product. How much you charge customers doesn’t always

directly correlate with the amount you pay to perform services.

In service industries, finding a target profit margin is not as simple. You don’t have an

original price to reference. Instead, your pricing formula for services should account

for the intangible aspects of running your business, such as time and value.

In short, pricing services is tricky business.

As a service-based business, it’s difficult to price services because we need a model

that is scalable yet flexible enough to solve our customers’ problems. Offering a

scalable, one-size-fits-all price can turn potential customers off because their needs

are typically not like those of your countless other customers. At the same time,

offering 100% custom pricing can limit growth because of the time required to quote

every facet of your services.‖

Your 6-step guide

Because there is not a set-in-stone method for pricing services, you have some

flexibility. Use the following six steps to learn how to price a service:

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1. Calculate your costs

2. Look at the market

3. Know your customers

4. Consider time invested

5. Come up with a fair profit margin

6. Charge an hourly or per-project rate

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 LIMITATIONS
The following are some of the factors which put a limit on the growth of a business:

1. Shortage of Labour or Capital:

If increased supplies of trained labour are not available, the growth of a business will

be automatically checked.

In the same way, if fresh capital cannot be raised, expansion stops. But these are not

insurmountable obstacles.

2. Nature of the market: If demand is limited or fluctuating, it will be imprudent

to increase the size of the business. The nature of demand is the most

importantlimitingfactor.Italmostsettlesthematter.Ifindividualtasteshavetobe satisfied,

large-scale production is ruled out.

3. Managerial Capacity: Another serious limitation comes from the capacity of

the manager. A point is reached in the expansion of a business beyond which it is not

possible for the manager to control it efficiently. There is a limit to what a man can

successfully manage. Beyond that point, supervision will become lax, materials will be

wasted and machinery mishandled. Cost will over take profits, and, in the end, the

profits may vanish. The limit is reached when the marginal revenue is equal to the

marginal cost.

4. Nature of the Industry: In some industries, large-scale production is out of the

question. They require close personal supervision, e.g., jewellery-making and tailoring.

Or, there are industries where there is not much scope for the use of

machineryanddivisionoflabour, e.g., agriculture, fruit and vegetable gardening,etc.

Bulky articles like bricks can only be made on a small scale, for it will not pay to carry

them over long distances

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5. Operation of the Law of Diminishing Returns: It happens sometimes that the

expansion of an industry leads to increasing costs and the returns are less than

proportionate. It will not be wise in such cases to expand the business.

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 CONCLUSION

The company's management is confident that The Company can achieve its

aggressive sales forecasts, generating total sales of approximately $XXX,XXX,

$XXX,XXX and $X,XXX,XXX in upcoming years, after the launch respectively. In

addition, The Companies' management has carefully considered its market, potential

customer base, and its ability to grow its sales average to capture market share.

The Company has the potential to become a highly regarded resource in local,

regional, national, and international markets. Due to the company's aggressive

marketing strategy, establishment of the company as a "unique" entity in its industry,

careful development of its products coupled with strategic partnerships with some of

the industry's leaders, and the company's profitable revenue model, The Company has

the potential to provide lucrative returns to potential investors.

For The Company to achieve status as an industry leader, it must secure initial capital.

This capital will be used for start-up costs, to establish a reputable storefront, and to

further develop the business, business infrastructure, internal systems, product

development, and extensive marketing and geographic positioning.

Providing that the company is able to acquire its funding requirements,

The Company will be able to achieve operational success for many years to come.

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 BIBLIOGRAPHY

 https://www.brightpearl.com/inventory-management-system/inventory-control

 https://www.fishbowlinventory.com/solutions/inventory-control

 https://en.wikipedia.org/wiki/Inventory_control

 https://www.netsuite.com/portal/resource/articles/inventory-

management/what-are-inventory-management-controls.shtml

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