How Systems Integration Yields Inventory Control for Fashion Brands

Posted by JR Siegel on Mon, Jun 10. 2013 @ 14:06 PM

Successful eCommerce fashion businesses expertly manage their inventory.  Hold too much stock, it languishes on your balance sheet, starving operations of cash. Hold too little, and stock-outs choke off potential sales.  

Getting inventory right requires a great purchasing team.  For your team to work their magic, they'll need real-time data on the number SKUs in inventory, units per SKU, how long each unit has been in the warehouse, the status of each unit, recent sales data by SKU, etc. Empowering them with this data requires inventory integration.   

computer connection

 

Inventory Errors ALWAYS Hit the End Customer

The inventory data you need to get purchasing right, and preclude unpleasant customer interactions, doesn't materialize from thin air. It comes from the complete electronic integration of your front end eCommerce platform and fulfillment center's Fulfillment Management System. At Quiet, we transfer data through XML files via Amazon Web Services (AWS).  

If you don't integrate your front and back end systems, discrepancies will arise, causing purchasing to make mistakes.  Worse still, these discrepancies will ALWAYS come back to negatively impact your eCommerce customers.  You can sell what's on your eCommerce site, but you only ship what you have in inventory. If a customer buys an item that appears on the website but isn't in stock in the fulfillment center, you'll have to call up the customer to apologize for the stock-out -- something we all want to avoid.

To show you how inventory integration works and how it can prevent these discrepancies from occuring, we're going to take you inside Quiet's client messaging system.

The Quiet Inventory Messages

We transfer two types of inventory messages to our clients: transaction-based and daily inventory summaries.  Transactional messages detail the unit's status as it travels through its life at Quiet:

Transactional Messages

  1. Quality Control - Once the product hits the dock, it is Quality Controlled (QC) and inspected for damages and irregularities.  
  2. Receipt - After the QC check is complete, we receive each unit against the Purchase Order, at which point the units are entered into our system and a message is sent to the client detailing what we've received.    
  3. Available - The inventory is put into a pickable location.  At this point it should register as available for sale on the client's site. 
  4. Allocated - When a customer purchases an item, one unit of that SKU is allocated to that customer's order.  If it's the last unit we have in inventory, that SKU will no longer appear on the brand's website.  
  5. Inducted - The unit is designated to an order tote for picking purposes.
  6. Picked - The storage pod containing the SKU is picked up by a Kiva robot and taken to a picking station staffed by an associate trained on that brand's requirements.  The associate places all of the items for the order into a distinct tote that is taken to a pack/ship station.     
  7. Completed - The items are packaged by an associate according to the brand's order presentation requirements, sealed and the shipping label is affixed. As a last step, the order is placed on the ship carrier's truck.   

Daily Inventory Summary Messages

The daily inventory summary for a SKU provides a snapshot of how many units are in each inventory bucket.  It is sent to our clients every night, and looks like this: 

inventory message
Even with such a comprehensive level of integration, there are two places where the system can break down.   

 

Transfers and Damages: Pitfalls and Their Cures

  • Transfer Orders
A Transfer Order is any type of order for which a client is essentially shipping their product to themselves. This could mean the units are going to a retail store location, distribution center, corporate offices or other locations for photography or PR purposes. These types of orders are fairly common, as many fashion brands have one warehouse handle their eCommerce distribution and another handle their retail and wholesale orders, but they can cause problems.  For example, suppose that a retail boutique needs five of your Size 6 blue dresses, but there aren't any in the wholesale DC, so you call your eCommerce fulfillment center and ask them to ship all five of the dresses they have in stock to the boutique. The eCommerce fulfillment center completes the order and decrements its inventory of this dress by five units, but because the transaction happened outside of the regular data transfer protocol (no one is buying those dresses online) the front end eCommerce platform will not know that the last five units of the dress left the warehouse. If an eCommerce customer orders one of those dresses, you won't be able to fulfill the order and will be forced into an uncomfortable customer interaction.
                                                                                         
You can prevent this from happening through a full multi-channel integration that includes all of your retail and wholesale channels in addition to eCommerce.  
  • Damaged Units
Suppose a customer orders a Size 8 fuschia dress. When the warehouse associate goes to pick the dress, he notices that one of the two dresses in inventory has a manufacturing defect.  After taking the damaged units out of inventory, he messages this data back to your front end system, where it sits, waiting to be pulled down from AWS. With one dress bound for a customer and three damaged out, there is no longer any inventory available for sale. Yet if you wait to pull the damaged inventory message down until the inventory summary report overnight, you run the risk of having a customer place an order for the Size 8 fuschia dress against non-existant inventory.   
                                                                                         
You can prevent it by setting your system to continuously pull data from your fulfillment center and not wait for the inventory summary report.  

 

Conclusion

Prevent inventory misalignment from impacting your end customers by taking the time to completely integrate your front and back end systems. The process will lead to better purchasing decisions, a healthier balance sheet and happier eCommerce customers. 

Interested in how to select the right fulfillment partner? Download our free ebook.

 

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Image Credit: dagelia

Topics: Ecommerce trends, Third party Fulfillment