The benefits of voice to avoid out of stocks

INFORMATION: Free information is available from ZETES on the subject in this story. Click here to request a copy

By James Hannay, Senior VP of Northern Region, Zetes.

A great deal is written in the trade media about the benefits of voice technology to improve productivity and accuracy, and how quickly the investment pays for itself in reduced operational costs.  But there are many other less well-publicised benefits to the adoption of voice by retailers, particularly in the back of store area, where it can be applied to improve stock availability.  As retailers start to predict what their best selling items will be in the run up to Christmas, can voice deliver quick wins to avoid the age old problem of out of stocks?

As we see it, out of stocks (OOS) tend to stem from two problems.  The first is not accurately anticipating demand and ordering the right products, which is a difficult nut to crack. This is exacerbated because many retailers still have poor traceability of goods from the time they are picked and leave the warehouse, right to the point when they are available for sale on the shelf edge. Having full visibility within the supply chain will eliminate a lot of costs associated with over-ordering, misplaced stock and shrinkage - all classic problem areas which even the most sophisticated retailers find a challenge.

The second factor behind OOS issues is more straightforward to correct and when rectified, can help to eliminate the first.  This arises because although products have been correctly ordered, they spend too long in the back of store area and shelving is not replenished quickly enough.  It you walk through virtually any supermarket wine aisle you can witness this first hand.  The empty sections on the shelves are nearly always the ones on promotion - and chances are the retailer will have plenty of stock but cannot replenish the shelves quick enough.  The bottles are sitting somewhere in the stock room waiting to be put away.

One solution which utilises voice technology has been identified by one of the retailers where many people are likely to buy at least one of their Christmas presents this year - Argos.  The solution was essentially created by turning an established use of technology - voice picking - on its head and applying it to improving back of store put away instead.

Although Argos' business model is different to other retailers in that they effectively have more sizeable warehouses in each store, their business driver was making the goods available for sale more quickly.  And this is a problem common to all retailers with out of stock issues.

In addition to speeding up put away rates, Argos is using voice as an alternative to manage a perpetual inventory system in store and deliver real time updates to the central warehouse whenever items held in stock fall below certain levels.  Again this is an approach other retailers could adopt, using voice to monitor shelf inventory accuracy and ensure products available in the store backroom are on the shelves.  Product availability monitoring can also be performed routinely for fast movers and promotional items, using the voice system to record in real-time, the transfer of stock to the shop floor.

So doing all of this improves inventory management and when replenishment orders are placed, they are more accurate which also reduces the level of out of stocks. In effect an easy solution to OOS problem 2 helps resolve the bigger challenge within OOS problem 1.  And as shown by Argos, voice technology offers a viable alternative approach.

Comments (0)

Add a Comment

This thread has been closed from taking new comments.

Editorial: +44 (0)1892 536363
Publisher: +44 (0)208 440 0372
Subscribe FREE to the weekly E-newsletter