Tactic 5: Leverage Data for Operations Improvement

If you have taken full advantage of automated systems, you can leverage the data in your systems with data analytics to inform better inventory management and operational decisions. You can optimise inventory levels, improve supplier performance, and increase throughput and accuracy in your warehouse to serve your customers better and drive your growth.

Key Actions

1.??? Create an Operations Dashboard to keep on top of daily activity and make sure you meet your KPI targets. Operations dashboards track current activity to keep you on track with your intended service levels. Make sure you never miss an order, Adapt when shipments are delayed, correct potential stock shortages before they become stockouts. Keep on top of daily activities and you are more likely to hit your KPI targets.

2.??? Establish inventory KPIs and review them at least monthly to monitor your improvement efforts. Inventory KPIs include stock turns per year, stock count accuracy, profitability by SKU, measures of over and under stock and service level (order fill rate).

3.??? Track your warehouse KPIs to monitor orders shipped in full on time, pick rate and pick accuracy, receipt to put-away time, pick bin replenishment rate, labour productivity per activity, stock location accuracy, returns processing time, warehouse capacity utilisation, slow moving and dead stock storage and storage cost per item.

4.??? Extract, transform and present your data with the right tools. Start with whatever reporting and dashboards are already in your software and use spreadsheets to fill in the gaps. Move on to use Power BI or specialised cloud reporting tools such as Zoho Analytics, Domo, Tableau, Qlik, Amazon QuickSight. Hiring an expert to build your reporting will be worthwhile if you don’t have the skills in house.

5.??? Data can be used proactively or reactively. Use data to proactively manage process output and drive improvement projects. KPI reporting and management reviews help you steer the ship by giving you an overall business perspective but this is a slower reaction to past performance.

Recommendation

Leveraging data analytics is a powerful way to optimise inventory management, improve operations and drive business growth in the ecommerce industry. By harnessing the power of data to inform your inventory management decisions and drive both proactive and reactive decisions you will keep your business healthy and growing.

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