Ted Baker’s £25mn blunder and six easy-to-avoid stock inventory issues.
In 2020 Ted Baker announced that they have managed to overstate the value of their stock by an astounding 25 million pounds – a reminder that stock accuracy and inventory management should be in the crosshairs for ecommerce and retail brands.
Amid other issues and tumbling profits for the global retailer, their “less than ideal blunder”, as some analysts were kind enough to point out, led to their share-price falling to a 10 year low.
Indeed, a cataclysmic error like this when it comes to stock management can have huge knock-on impacts across any business: public scandals and failures to offer the customer experience required to keep up in the retail market are just the start.
Fortunately for ecommerce retailers, here we can outline the six biggest issues we see that cause stock errors and inaccuracy in the warehouse, and how to fix them:
1. You aren’t clear what items are being delivered to your warehouse.
Accurate stock inventory starts at goods-in. When receiving items into the warehouse, it is impossible to maintain true inventory levels without a foolproof system for ensuring everything ordered through the purchase order is in the boxes and on the palettes. One item missing, or one item too many, and whatever method of updating inventory to website, accounts, balance book etc will be unable to transfer the correct data.
Solution: A robust warehouse management system with the ability to receive goods by purchase order cross checks every item with the PO it is supposed to be from, ensuring each PO is received completely and has been accurately fulfillled by the supplier.
2. You aren’t tracking items from goods-in to their location in the warehouse.
Once items have been received, they must be moved across to the main storage area of the warehouse, for pickers to pick them. Traditional operations may rely on having a specific space for each type of item they stock, which requires an acquired memory of the warehouse. If this area is full, or the worker can’t find it because they don’t know where it is, items will get dumped elsewhere. When these can’t be found by someone else later, there’s uncertainty around stock levels. Moreover, if there’s no real-time log of when an item has been moved from goods-in to a pickable location, again, you can’t be sure what is where, when.
Solution: A powerful tool for warehouse management allows every action in the warehouse to be tracked. Scan the item, the location you’re taking it from, and the location you’re moving it to, and in live time it is logged exactly where that one thing is, always. A system of this nature will also enable the warehouse to do away with memory reliant storage, and instead adopt a dynamic location system.
3. You’re still working with paper.
Paper is the pinnacle of warehouse inefficiency. Leaving aside all the other issues paper causes, accurate stock-keeping is almost impossible, and painfully slow. At scale, relying on things being crossed off with a pen, boxes being checked, reams of paper being handed back and forth between goods-in, pick, dispatch, manually updating item availability is a gruelling task, with massive room for error.
Solution: A full web and mobile warehouse management system eliminates these issues and enables the automation of all communication whenever anything is picked, moved or dispatched. Stock inventory management as you work!
4. Your website isn’t being updated in real-time.
The plight of the average online shopper is seeing an item available, buying the item and then having an email through the next day to say despite your money being taken, we’re going to have to cancel your order as we don’t actually have that item. Sorry… The opposite of this is an overly cautious retailer missing out on a number of sales by taking items off their site, or making them “out of stock” at the nearest hint that they may be running low on that item or items. Either one is bad for business and bad for customer retention and experience.
Solution: A live, cloud based system that is mobile driven and has an immediate connection to the website. With the right integration, every action that is carried out on a device in the warehouse will make a small adjustment to the website stock levels, keeping it accurate moment by moment.
5. You can’t handle lost, damaged or stolen items.
Perhaps even more frustrating for the warehouse manager (and the end customer) than not having an item in the warehouse when needed, is when the item is indeed in the warehouse, but lost, missing, unfindable, damaged when found or accidentally or otherwise ‘misplaced’. Orders that can’t be fulfillled for these reasons are being cancelled, and stock levels are getting further from the truth, because pickers aren’t given enough flexibility or a better option when they encounter these issues.
Solution: A warehouse system that provides a “skip” functionality. When the picker realises, for any of the above reasons, that they can’t pick an item, they can be prompted to skip that pick and move onto the next one. Behind the scenes, the tech will find the next location where that item would be available and add it into the pick route seamlessly. At this point, it is crucial to note the importance of the stock control team. Alongside this “skip functionality” our warehouse management software allows the stock control team to be alerted to the issue, lock the location in isolation to stop anyone else having the same problem, and then either remove or replace the broken/missing item and bring that location back live.
6. You can’t run live reports.
Clear dashboards and well-designed spreadsheets are crucial tools in the arsenal of a warehouse manager or operations director. They form the basis for taking all accumulated data from the warehouse, particularly around inventory levels, and feeding it into wider systems. However, if you don’t have the right sort of system in place, a “stock-take” could well be an inaccurate, lengthy and manual process. We’ve seen with Ted Baker, getting the data wrong can be disastrous.
Solution: With every item traceable to locations, and every action of every warehouse operator tracked throughout each session, a powerful WMS can run a wide range of custom reports to analyse the warehouse operation. An entire audit of inventory can be pulled and presented at any required moment. Moreover, with oversight of the entire warehouse, quick diagnostics are available for any issues that might crop up around delays or sticking points in the fulfilllment.
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