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Rapid Demand Changes Highlight Need for SAP Extended Warehouse Management

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Rapid Demand Changes Highlight Need for SAP Extended Warehouse Management

It’s beyond obvious the ongoing COVID-19 pandemic has forced many changes on the food and beverage industry. Whether it’s in restaurants, bars, grocery stores, warehouses or various points along the supply chain, the industry has had to modify and adapt to a new reality that no one could have foreseen at the start of 2020. This new reality has spawned several trends among consumers, food and beverage companies and suppliers. These trends indicate that an efficient SAP Extended Warehouse Management application is more of a must today than ever before.

Retailers and Consumers Forcing Manufacturers to Quickly Adapt

Consumers today have more food and beverage choices than ever before. This unprecedented array of selections offers new opportunities for manufacturers (such as new revenue streams) as well as new problems. Each trip to the supermarket reveals new products to try as companies struggle to gain market share in a cutthroat industry. And manufacturers fight for space and location on grocery shelves knowing these have a measurable impact on sales, and thus demand. An unfavorable shelf placement could dramatically affect consumers’ choices and manufacturers’ revenues.

A greater variety of products makes it more difficult for companies to react to sudden changes in demand when a new item takes off in popularity. Or likewise, it’s harder to react when a product’s sales decline due to a competitor rolling out something new in that category, leaving warehouses stuffed full of slow-selling product.  

What happens when shifting consumer demand leaves a manufacturer with more inventory than it can sell? For one, it leads to higher inventory carrying costs that eat away at profit margins. Next, unlike a spark plug or a capacitor in a parts warehouse, foodstuffs are perishable; they can’t be stored indefinitely until demand picks up. This often leads to spoilage once the overstocked item approaches it use-by date. It also means valuable warehouse space is spent storing a slow-moving product, crowding out room for faster-selling items that could bring in revenue instead of creating extra expense.

Manufacturers invest considerable money in ways to improve forecasting of retailers and consumer demand. That’s because there’s a lot riding on being right. An accurate forecast means a smooth flow of raw materials to the production line and of finished goods to the warehouse and to the store. Retailers have an ample supply and manufacturers enjoy incoming revenues and stronger profit margins. An inaccurate forecast can prove costly. Either there are shortages, which results in unhappy retailers and consumers who take their dollars to the competition, or there are overstocks with all the problems that entails.

Inventory Inaccuracy a Sure Path to Failure

Manufacturers need accurate inventory data to give them the flexibility and agility to anticipate and profitably respond to the rapid changes in demand now seen throughout the industry. For that reason, they are actively seeking solutions that will help them better keep track of what’s coming into their warehouses, how and when it moves through the various warehouse steps, where it is located at any given moment in the process, the quantity of inventory in the warehouse and in a bin, and when the product leaves the warehouse for its ultimate destination. This data plays a key role in enabling a manufacturer to respond to rapid changes in retail and consumer demand while maintaining optimum stock levels to maximize revenues and support profit margins. 

SAP Extended Warehouse Management (EWM) Offers a Solution

There is a solution available to mitigate the obstacles described above. SAP’s Extended Warehouse Management is a way for food and beverage manufacturers to efficiently manage inventory and better control products through each step of the warehouse process. EWM automates outdated manual warehouse processes and streamlines many others.

Several companies offer systems that work in conjunction with SAP EWM to increase its capabilities. Innovapptive is one such vendor. Innovapptive’s SAP-certified Mobile Warehouse Management application, mInventory, gives food and beverage warehouses a no-code, highly-configurable and scalable solution that:

Using mobile handheld devices, such as smartphones or barcode scanners, front-line warehouse workers scan item barcodes or use OCR to scan label text. Inventory records are instantly updated in the back office system and can be reviewed by key decision makers enterprise-wide via mobile devices and desktop dashboards.

mInventory adds greater control during movements within a warehouse, such as receipts, putaway, picking and transfers. Warehouse supervisors can track all warehouse activities in real time and respond quickly if when things go wrong. Finally, with improvements in end-to-end warehouse processes will boost not only inventory accuracy, but customer service as well.

Want to Learn More?    

mInventory is a mobile-first, highly-configurable EWM solution that can deliver greater inventory accuracy. It will ensure your warehouse has the flexibility and agility to quickly respond to market changes, keeping retailers and end consumers satisfied.  To discover more, talk to our experts now at 844-464-6668, or visit www.innovapptive.com.

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