a smart approach to inventory management€¦ · when it comes to inventory management, technology...
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A SMART APPROACH TO INVENTORY MANAGEMENT
Copyright © 2019 Petrosoft LLC | All Rights Reserved
290 Bilmar Drive, Pittsburgh, PA 15205 | Phone: 412-306-0640 www.petrosoftinc.com
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When it comes to inventory management, technology can help to improve operational efficiency in your con-
venience or retail store. By leveraging the right technology solutions, you can accurately monitor and manage
inventory in real-time, reducing human errors as well as shrink and spoilage. Retail software systems can also
guide you in making smarter decisions about inventory levels and product mix by helping you increase your
bottom line by avoiding under and overstocks by increasing product turnover.
In this white paper we review three types of inventory management technologies, explore how managers and
owners use technology to their benefit and provide tips on how to assess potential software solutions you
may be considering for your store.
INTRODUCTION
TYPES OF INVENTORY MANAGEMENT TECHNOLOGIES
1. Handheld Scanners
Handheld scanners are a simple but essential tool for
conducting and recording your manual inventory counts
faster and with fewer human errors. Scanners can also be
valuable when you receive and add in new inventory
items.
When purchasing scanners, consider the following:
Type of barcodes you’ll be scanning
Distance from barcode to scanner
Battery life requirements
Durability
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2. POS Systems
Point-of-sale (POS) systems allow up-to-the-minute reporting, automatically updat-
ing your inventory numbers as sales are completed.
A detailed sales history can then be analyzed with your back-office system to obtain
valuable information to forecast and guide future purchases.
Another benefit of the right POS is an audit trail for investigating errors or theft, with
tools for tagging and tracking high-risk events such as no sales, refunds, voids, and
cancels.
POS systems can also help you decrease risk and enforce compliance around FNS
and age-restricted sales. Lottery management features that include early theft detec-
tion and alerts based on serial number tracking.
POS systems become the most useful when they work as
part of an integrated retail ecosystem within your store.
Your POS should seamlessly communicate with your ana-
lytics, foodservice, back-office, loyalty, and forecourt sys-
tems to streamline data transfer and ensure current and
consistent pricing and inventory details.
3. Back-office Systems
Back-office systems simplify and speed up tracking current inventory, forecasting future needs, and optimizing
your product mix to support revenue growth.
Cloud-based systems allow you to oversee store operations from any computer or mobile device. Also, they
can and should integrate with your POS systems, accounting packages, fuel, merchandise, and data suppliers
to further increase operational efficiency.
With a back-office system, you can determine optimal in-
ventory based on sales performance and historical data.
Combining this information with knowledge of your cur-
rent inventory status and vendor delivery schedules,
your back-office software can recommend timely
strategic purchase orders.
Inventory management technologies help to ensure that
every item is there for a reason and generates profit.
Without means of efficient control, you will never have a
true account for how your store is doing.
Accurate forecasting requires extensive data and analysis.
Order too much and items sit on your shelves, tying up
valuable space and precious capital, eventually leading to
spoilage or shrinkage. Order too little, and you lose out on
sales and disappoint customers who may not return to
your store, especially if popular items are consistently out
of stock.
Forecasting Future Need
According to NACS, the average
weighted in-store inventory at
cost in a c-store is $95,512 for
urban areas, and $86,633 for
rural areas.
How much money is sitting
on your shelves?
Source: NACS, State of the Industry Report® of 2017
C-Store Office ® by Petrosoft
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For current inventory, you can use back-office software to track items by category, department, price group,
promotion, tag, or risk level. At any time, you can recalculate the value of your inventory and project over or
understock.
When product shrink is revealed, you can delve into item-level reports to investigate the cause and deter-
mine how to address the issue. Back-office software
can help you find and quickly correct inventory pur-
chase, fulfillment, or vendor invoicing errors. It can
also produce fuel inventory reports, automate as-
pects of BOL and invoice entry, and adjust fuel inven-
tory volume, purchases, and pool margin calculations
based on approved invoices.
Inventory Tracking and Issue Monitoring
Internal theft and paperwork errors may be elim-inated with the help of a right loss prevention software and processes in place. Gaining control over 50% of your inventory shrinkage is a huge step to optimizing operation of your retail business.
Optimizing Your Product Offering
Your inventory turnover ratio and profit margin should be
continually monitored and compared with industry averages
to optimize your product mix and pricing. Without a back-
office system, this would be a tough and time-consuming
task. In addition to finding low margin items, software can
identify fast and slow-moving stock and even dead invento-
ry that may need to be moved to another store location
where that item is more popular. Equipped with all this in-
formation, you can weed out slow-moving and low-margin
items, shifting your product mix to faster-moving, and high-
er-margin products to boost inventory turnover and profit.
Stores that purchase larger amounts of inventory will need to sell more to improve your turnover. Sales must match inventory purchases to ensure efficient inventory turnover. Accurate inventory tracking in real-time reduces under and overstock and holding costs.
The National Retail Federation reports that 33.2% of all losses
are caused by internal theft and 18.8% – by administrative
errors
More than 50% of inventory
losses can be prevented!
NACS data: c-store inventory turns an average of 11.5 times per year
Do you know your current turnover ratio?
Loss Prevention Analytics by Petrosoft
Source: NACS, State of the Industry Report® of 2017 Data
Source: “Share of retail inventory shrinkage in the United States from 2015 to 2018”, Statista, 2019
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CHOOSING THE RIGHT INVENTORY MANAGEMENT TECHNOLOGY
When choosing inventory management technology, there are several criteria that need to be considered. To
make the right decision and choose a solution that corresponds to your needs, decide why you need this
particular solution. Does its functionality meet your requirements? Can it be integrated with hardware and
processes that you already have? Is this technology scalable and adaptive? Is it secure and easy to use?
Below is a question-based checklist that helps to assess inventory management technology and make an
informed decision. For convenience, the questions are divided into groups. Go through all of them, read
specifications and ask product and service providers to form an understanding of their solutions.
Integration and access Functionality
Implementation, cost, support
What safeguards will ensure my data is secure?
How will my data be saved and backed up? How quickly can I realize ROI on this invest-
ment in new technology?
What role-based access controls are included?
How can I access these tools when I’m away
from my store or computer?
Will this integrate with my current systems or
other industry systems?
How will this support inventory tracking,
forecasting, and issue prevention?
What type and level of inventory reporting is
available?
Is the solution cloud-based or on-premises?
Can I use this for managing across multiple
stores?
What time and effort is involved in setup and
implementation?
Is a demo available so that I can see ease of use
and key features?
What kind of customer service and technical sup-
port is available?
Are case studies and/or references available?
What is required to maintain and update this
technology?
What is the pricing model associated with this
solution?
CONCLUSION
To maximize profit and operational efficiency, technology should be a key part of your inventory management
processes.
Implementing and integrating back-office and POS systems, along with using handheld scanners, will allow
you to boost inventory turns, reduce human errors and theft, and improve inventory tracking and decision-
making with detailed documentation and current data.
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OUR SOLUTIONS
Handheld Scanners The CipherLab 9700 is a best-in-class handheld barcode scanner. Its versatility
enables quick and efficient bar code scanner captures and instant data trans-
mission.
Sign up as a C-Store Office customer, purchase the scanner, and Petrosoft will upload an existing C-Store Office customer’s price book and the CSO software
to the scanner at no additional cost.
Point of Sale Systems (POS)
SmartPOS® point-of-sale system offers an easy-to-use POS
with analytics, foodservice, back-office, loyalty, and forecourt
integration options. Integration with industry partners helps to
ensure consistent pricing, optimal inventory levels, and cus-tomer satisfaction.
With Loss Prevention Analytics integration, retailers gain new
dimensions of knowledge and insights into when and how
sales are occurring, enabling detection, correction, prevention,
and verifiable proof.
Analytics
Petrosoft offers back-office solutions for the convenience and retail
industries. These solutions deliver operational insights by stream-
lining retail operational workflows, data inputs, and data outputs
through a secure cloud-based (SaaS) solution and integration with industry-leading retail systems.
Retailers can gain control of their business and influence their bot-
tom line with this solution designed to make an impact where it
matters most, in day-to-day retail operations. As a subscription-
based solution, customers can access it from any Internet-
connected device or through the C-Store Office® mobile applica-
tion.
Back-office Systems
Loss Prevention Analytics discourages theft with verifiable proof, identifies employee training issues, quickly
helps to verify transactions, risk events, and employee claims. The solution includes a cloud-based interface
enabling retailers, from any location, to quickly drill down into reports and click through to view the associated
video footage from any Internet-connected device.
Petrosoft’s Advanced Analytics provides retailers with data-guided insights. This solution is a data engine that
handles vast amounts of information for your business in real-time and enables product mix and inventory op-
timization.
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412-306-0640 • [email protected]
petrosoftinc.com
Petrosoft Inc.
290 Bilmar Drive, Pittsburgh, PA 15205, USA
412-306-0640
Copyright © 2017-2018 Petrosoft INC. All Rights Reserved. Trademarks are the property of Petrosoft
and the respective companies. Patents pending. Specifications are subject of changes without notice .
Petrosoft is not responsible for errors and omissions. Petrosoft makes no warranties or commitments
concerning the availability of future products or versions.
ABOUT PETROSOFT
OUR PARTNERS
Petrosoft’s founder is a retail operator and engineer who initially developed a cloud-based back-office
software solution in 2002. Today, the company provides a platform, integration options, software,
hardware, and services.
The company’s out-of-the-box and custom integration options, technology, and services are designed
to take advantage of advances in technology, leverage legacy systems, leverage industry partnerships,
address changes in consumer demand, and enable seamless connections within today’s retail ecosys-
tem.
The company’s technology is positioned to deliver a measurable return on investments (ROI) to retail-
ers since it is focused on where sales and profits are realized, within day-to-day operations. The com-
pany continually strives to create innovative solutions, enabling retail operators to manage their on-
site and back-office operations more efficiently. Retailers can use these solutions to decrease risk, lev-
erage legacy, data, and systems, as well as to optimize inventory, productivity, sales, profits, and mar-
gins.