If You’re Losing Time, Money and Patience During Physical Inventory Counts, You Might Want to Rethink Your “Service”
I know that most inventory counts are still conducted by third-party service providers. But with software-as-a-service (SaaS) offerings now available specifically for inventory counts, why bring someone else in to do the job when you already have the headcount and hardware in house?
No one else has a higher stake in your inventory performance than your associates. If shrink is well controlled, shelves stay stocked, and customers submit glowing feedback on their shopping experiences, then associates will be rewarded. On the flipside, they will be the ones who suffer most when complaints come flowing in, as they’ll be the ones answering to upset customers, managers, and suppliers when items are missing from shelves. Their jobs may even be on the line when losses increase, as job security is dependent on business performance. And, in retail, business performance is dependent on inventory performance.
Those aren’t the only reasons why you should shift from a third-party inventory service to a managed SaaS approach, though.
Just consider the labor shortage.
When your team is lean, or just really busy, it may seem smarter to outsource inventory counts. But everyone is short staffed right now. There are hundreds of thousands of open jobs in the retail sector, despite hiring sprees. Given that third-party physical inventory companies have to rotate and balance their workforces across multiple customer sites, especially during annual count season, they may struggle to get enough people to your stores. So, outsourcing as an augmentation strategy may backfire.
On the other hand, reallocating your “services” spend to a SaaS solution would give you the flexibility to conduct the count on your terms, using your team – which is already familiar with your mobile computing and scanning devices, store layout, products and processes. There is no learning curve, not even with the new inventory count software. (At least not if they’re using the Zebra SmartCount™ app.)
Associates just have to look at their mobile device screens to see what to scan when, and you can look at the SmartCount dashboard from any internet-connect device, at any time, to get the latest updates on inventory levels, count progress and more.
If you’re worried that a SaaS-powered inventory count solution would put a strain on your IT team, which may also be short staffed, then I hope it will ease your mind to know that in-sourcing inventory counts is as simple as a quick software download onto your workers’ mobile computers. Store managers or associates could technically complete that download without IT intervention if you were comfortable letting them do so.
Calculate the costs of augmenting versus retooling staff.
With the rate of digitalization in the retail industry, I’m assuming your associates are already using mobile computers in your stores in some capacity. If I’m correct, then the cost of in-house inventory counts should be limited to the licensing fee for the SaaS app, which is usually a fraction of what the third-party service fee typically runs for a single physical count.
Once you download the software on your owned mobile computers, then you can use it as much as you like throughout the duration of your licensing agreement. Hypothetically, you could keep the license active all year long and use it for cycle counts or possible even returns inventory counts. You already have staff at the ready. You just have to rework your shift assignments to ensure there are enough people on the schedule to manage the count as well as daily store responsibilities, such as shelf replenishment, order picking and curbside delivery. If you’re still only conducting counts once or twice a year, that’s okay too. With SaaS, you can start and stop your service as it suits your business.
Now, if you don’t have enough mobile devices on hand to execute physical inventory and routine store operations, I have good news.
You can rent mobile devices pre-loaded with the right software for your inventory counts – or at least you can with Zebra. Just tell us how many extra devices you need to supplement your current fleet, and we’ll send the kits to you with the Zebra SmartCount software preloaded on the devices. Once you’re done, you just send them back. If you need a hybrid solution – say, five preloaded devices and then five SaaS licenses for your owned devices – that’s always an option too.
And no matter which option you choose, it will always be less expensive to bring your counts in house than to outsource.
The Breakdown
Though it’s impossible to get into the hard numbers here, given that each retailer will be calculating the cost of inventory counts from a different starting point from a hardware and software perspective, the fact is that your staff is going to complete the physical count faster than any outside team. So, labor efficiency will reduce the hourly or daily labor rate.
You’re also paying a premium for outside labor, as you’re covering the other company’s overhead as well as each worker’s wages. Then there’s inflation, which is leading to service premiums in every category – including physical inventory services. You must also consider the financial penalties for late reporting, undetected shrink, or poor inventory planning as well as the consequences of miscounts.
With retail experiencing losses at record rates – both from a labor and shrink perspective – it’s critical to control what you can. By switching from a third-party physical inventory service that you have no control over to a SaaS solution that gives you total control over labor, timing, and outcomes, you’ll be in a position to gain better control over your inventory, store execution and customer experience.
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Editor’s Note:
If you are interested in downloading the Zebra SmartCount software onto your associates’ mobile computers, or you are looking for a total hardware and software solution to support an upcoming in-house count, you can reach a member of the Zebra Retail Solutions team here. They can help you weigh your options, including the newer SaaS offering, so you can find one that best supports your needs, no matter your budget.
You may also want to check out this Zebra SmartCount Fact Sheet and this new e-book.
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Jim Sermonet
Jim Sermonet is currently the Director of Sales for Zebra Retail Solutions (ZRS) where he is responsible for driving the new business development for ZRS at Zebra Technologies. Jim has more than 14 years of experience within the retail and hospitality industry and has been a part of several significant achievements that transformed digital business practices for large household brands.
Previously, he served as Director of Sales at NCR- Hospitality as well as Director of Sales, Retail, at Zebra, where he managed sales teams focused on selling end-to-end solutions and changing legacy go-to-market strategies.
Jim holds a BA in Psychology from The University of West Georgia. He is an Atlanta native and currently resides in Peachtree Corners, GA with his wife and son.
