Managinga successful business without any hitches is every investor’sdream. However, there are always unforeseen factors that presentmajor challenges in keeping up with the demands of the customers.Both the products and services sector face major challenges when itcomes to proper management of inventories. There are countlessfactors that revolve around supply and demand and the cost involvedin ensuring smooth flow of products between the producers and the endusers (Binti, 2016). Technology has been key in developing systemsthat enable stakeholders in the business arena to monitor the flow ofproducts. However, businesspersons would confess that they have nevermanaged to control the movement of goods without delays or runningout of stock (Peppard & Ward, 2016)). Alliance supermarket hasbeen using a point-of-sale system to analyze stock and manage thebusiness’ operations. However, the management has not succeeded inensuring excellent service delivery. The system in place offersinformation that the business can exploit to better services and keepup with the stock requirements of the customers.
MoreUses of Data from Point-of-Sale (POS) System
Collectinginformation on shopping patterns of individual customers is the keyto reducing inventory management costs while bettering services. Longare gone the days when monopoly was in play, and the customers werelimited to particular famous brands. Today, there are advancements intechnology that have enhanced communication and made sharing ofinformation among customers more convenient. It is the responsibilityof businesses like Alliance supermarket to device methods to trackinformation regarding individuals to help the business stock theright products and reduce inventory costs. Individuals’ data willprovide a projection of expected shopping patterns and given ampletime the business may manage to project the future structures.Humans are resistant to change, and it would take a long time for aparticular purchase pattern to take a different dimension. Businessesstill stock products despite the slow movement from given stores. Itis impossible to draw conclusions without accurate data and what mostbusinesses do is approximations without any certainty regarding aparticular product.
InnovativeUses of Data from the POS System
Metadataand Collection of Alliance supermarket customers’ preference andpurchase patterns may be the primary avenue to keeping up with theproducts demand. Apart from the POS system, the management mayconsider introducing customers personalized cards that will keeptrace of purchasing patterns. By doing so, the business will know howoften a particular client purchases a particular product andincorporate that into the information on the system. Other factorssuch as sex, age, origin, and preference will help in reducinginventory maintenance cost because they control every aspect ofsupply and demand (Johnston & Marshall, 2016). Today, businesseshave ceased from targeting everyone and narrowed down to specificgroups as a strategy to better serve the customers. There may beanother brand of a particular product that will not be sold because aparticular group identifies with some other specific items. Thecompany may accrue additional costs in upgrading the systems, butthey will be better placed to track the movement of all theirproducts and adjust the stock management plan.
Acquisitionof Customers’ Information and Ethical Compliance by the Business
Theintroduction of customers’ smart cards may be one thing andencouraging them to use them at pay points during their shopping isanother thing. Alliance may decide to offer discounts and otherbenefits whenever customers use their smart cards for shopping.Product promotion can benefit from the cards too. Alliancesupermarket may partner with other producers and offer half price fornew products. By taking that course of action, the customer will getthe motivation to acquire and use smart cards.
Theextra cost of inventory management can then be diverted to thepromotion process, and that has always been every business’ dream(Davenport, 2013). If the business conducts an extensive research andimplements the technology effectively, customers will never run outof stock. The business will accrue the greater benefit of reducinginventory costs, and that guarantees an increase in profits.
Educatingthe customers on the importance and benefits of acquiring the cardsmay prove complex, but in the end, it is a win for all the concernedstakeholders. However, the systems must be air tight to help avoidabuse of customers’ privacy. Despite the collection of informationon their shopping patterns, they have to be certain that theirprivacy is not compromised. Questions may, however, arise aboutfirst-time customers. The inventory management costs are neverdetermined by the new clients but rather the regular ones. Customersattending a conference, for instance, may visit the business anddeplete a particular stock. The occurrence is a one-time occurrencethat the business may have in their plan.
Toconclude, technology has immensely evolved, and the only way to haveinventory under control without incurring extra costs is to have adirect link with the customers. It is cheaper to incur high initialcost in establishing a technology that will interact with the POSsystem to manage inventory rather than leaving everything to fate.The smart card technology is a great way to go. However, it may provecumbersome for the customers to carry the smart cards whenever theyare off to shop. The business may introduce a mobile application thatis a replica of the information contained in the cards. Whenever thecustomers forget to carry their cards, the smartphones can play thesame role in providing information on shopping patterns. Any businessthat tracks the purchase characteristics of the customers regardingage, sex, and other personal details will always have an outstandingreduction in inventory management cost.
Binti,D. F. (2016). InventoryManagement System (Doctoral dissertation, East West University).
Davenport,T. H. (2013). Processinnovation: reengineering work through information technology.Harvard Business Press.
Johnston,M. W., & Marshall, G. W. (2016). Salesforce management: Leadership, innovation, technology.Routledge.
Peppard,J., & Ward, J. (2016). Thestrategic management of information systems: Building a digitalstrategy.