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5 Reasons Why CPG Brands Should Prioritize Digital Transformation8 min read

October 3, 2023   |   6 min read
5 Reasons Why CPG Brands Should Prioritize Digital Transformation

5 Reasons Why CPG Brands Should Prioritize Digital Transformation8 min read

Reading Time: 6 minutes

We are living in unprecedented times. Ongoing supply chain disruptions, global conflicts, and recent inflation have changed consumer habits, causing a number of weaknesses to be exposed in supply chains all over the world. In addition to facing severe inventory challenges and financial uncertainty, brands are now required to change the way they operate to accommodate remote or hybrid work styles and their associated logistical challenges. 

Businesses are searching for solutions that can streamline and optimize processes – to not only cope with volatile demand but also to protect their supply chains from lasting disruptions. Digitizing their supply chain is the answer.

Below we outline the top 5 reasons why it is critical for CPG brands to prioritize digital transformation.

1. Get ahead of major supply chain disruptions

The unpredicted speed, scale, and severity of the COVID-19 outbreak caused massive changes to consumer lifestyles. In response, supply chains, which were already vulnerable, experienced substantial disruptions. Global market volatility and errors in forecasting were already substantial contributing factors to inventory issues up and down the supply chain. The fact is, whenever demand is hard to predict, or incorrectly forecasted, any fluctuations at the retail level can cause mounting problems along the supply chain. This is known as “the bullwhip effect.” A sudden change (increase or decrease) in consumer behavior may start off as a small ripple, but as we move further up the chain, it drives substantial variations and uncertainties in supply, demand and lead time, culminating in excess inventory and potentially serious revenue losses. 

The outbreak of COVID-19 drove a surge in panic-buying all around the world. With measures put in place to control the effects of the virus, manufacturers and distributors are suddenly unable to operate efficiently. Problems sourcing raw materials and social distancing measures have impacted the workforce, and due to these disruptions to the supply chain, industries are now struggling with enormous inventory problems. 

At the time, the consumer packaged goods (CPG) industry in particular was at the center of panic-buying. With this sudden upswing in consumer demand, retailers and grocery stores experienced an inventory shortage of essential goods leading to consistently empty shelves. CPG brands then scrambled to ramp up production to meet the rise in demand. As COVID-19 restrictions eased up over the years, consumers slowly returned to focus on experiential spending and non-essential goods, causing brands to once again pivot their focus. Today, we’re continuing to see fast changes in spending habits once again as inflation and concerns over recession influence consumers to refocus their attention and income towards CPG and essential goods or reduce spending altogether due to new financial limitations resulting from lay-offs or furloughs. The challenge to keep up with rapidly shifting demand has resulted in a surplus of inventory that cannot be easily shifted. 

Though the speed and severity of recent supply chain disruptions came as a surprise to many industries, those with responsive and digital supply chains were best suited to weather the storm. With the right technology, businesses can gain full visibility over their inventory, with complete transparency and control at every stage of the product life cycle. The implementation of the technology enables companies to reduce the impact of the bullwhip effect, as brands are granted greater insight into a more agile & digital supply chain. By understanding where inventory is, and leveraging data to decide how to move that inventory in the future, brands can more easily adapt when there are sudden shifts at the retail end and prevent major disruptions further up the supply chain.

2. Centralize information into a single source of truth

The supply chain is made up of stages, all the way from development to retail. Each stage within the chain tends to be siloed – with different information sets being stored separately across the entire chain. The result of this is a rigid supply chain that cannot adapt to disruptions like the ones we’ve recently experienced due to events such as the COVID-19 pandemic, fuel shortages, the Russia-Ukraine war, or inflation. 

Technology offers a consolidated solution. Instead of information being held in different locations, an effective digital supply chain solution will serve as a centralized system of record where inventory information can be easily viewed, updated, and managed instantly from anywhere. Armed with this information, brands will benefit from greater visibility and more streamlined workflows at every stage of the supply chain. This is critical at times like this, when brands are forced to quickly identify and offload even more excess inventory than expected. 

A centralized system of record reduces the risk of costly errors by creating supply chain visibility across the organization. Many enterprise brands still rely on extremely redundant, error-prone processes with regard to supply chain monitoring and planning, with information often being manually updated and passed through several teams via emails and spreadsheets. This creates major risks for human error. By leveraging technology as the single source of truth for all product information and history, brands can confidently prevent errors that might escalate into bigger problems throughout the supply chain.

3. Make strategic, data-driven decisions to sell higher volumes at better margins

Supply chain management in fast-moving industries is often reactive, rather than proactive, leaving brands weakened in times of stress. By introducing the right technology into the supply chain, it’s possible to gain greater insights and make proactive data-driven decisions that will protect your organization down the line. The right software in place will allow brands to instantly know how well their inventory is performing at any given period and whether any immediate adjustments need to be considered. Brands can also leverage historical data and insights on an ongoing basis to proactively determine what and how much inventory to move, as well as the best way to move it on prior trends or results. By making more strategic decisions based on data, brands can effectively sell higher volumes of excess inventory at better margins.

With data easily accessible at every step in the supply chain, it becomes possible to pinpoint areas of weakness and identify the actions needed to stay ahead of any potential disruptions – such as finding a different supplier, looking for alternative delivery transport, or simply optimizing the management of existing inventory. Utilizing data at each stage also gives brands the power to collaborate with every party involved in their supply chain, allowing all teams to take faster action during critical periods. 

4. Reduce operating expenses to meet financial goals

One of the most expensive, recurring problems that brands have is excess inventory. When a business has excess inventory, they have to pay for all of the warehouse space, insurance, taxes, and personnel associated with its storage. This means that the longer excess items are stored, the more expensive these costs become. Inventory continues to devalue over time, and industries that have excess products with an expiration date stand to lose more money without any return on investment. Brands have previously held excess inventory in warehouses for as long as 180 days, and now that the brick-and-mortar retail market is currently at a standstill, costs associated with excess inventory will only continue to rise. It’s in every brand’s best interest to try and reduce these costs as much as possible.

Earlier, we mentioned that the right technology can empower brands to make strategic decisions and determine the best way to move inventory. One of the positive impacts of this approach is achieving higher margins, but another impact equally as important to the bottom line is reducing operating costs. Implementing technology can help brands more quickly and efficiently offload excess inventory while they are still valuable, reduce warehousing and operating costs, protect a business from long-term losses, reduce waste, and stay on track with financial goals.

5. Adapt to the changing work-remote landscape 

The nature of the COVID-19 outbreak has created a surge in remote work by enforcing social distancing and mandatory shelter-in-place regulations. Although many businesses have implemented a return-to-office policy, there are equally as many businesses that have permanently implemented a remote-only or hybrid working policy for employees. With employees now provided with the flexibility to work from multiple locations, businesses are challenged with implementing new tools and processes in order to maintain operations and ensure efficient communication and collaboration.  

In addition to video collaboration software, enterprise brands are increasingly investing in digital solutions for everything from freight forwarding to last-mile transportation and inventory management, technology that is proving to be an invaluable asset to the workforce during this time. Technology today empowers brands to manage and sell inventory to retailers in a fully remote environment, eliminating the need for in-person meetings to evaluate products, negotiate, and complete transactions. With shared access to a centralized platform, it’s still possible to achieve the same level of productive collaboration across teams as it would be when sharing a physical office space. The working landscape will continue to evolve as remote work becomes more commonplace, and businesses that leverage technology to adapt to these changes will be the ones best positioned to succeed.


Building a digital supply chain that can weather the storm of current disruptions requires having the right technology in place. INTURN is the only enterprise software solution that empowers brands to efficiently sell slow-moving and excess inventory to retailers and recover cash faster.

With INTURN, you have the tools to centralize your data, streamline your workflows, and optimize your margins. Interested?  Learn more

ABOUT THE AUTHOR engineers bespoke AI transformation roadmaps for enterprises across industries. Retailers to resellers, auto-extracting data from files to extrapolating fashion styles, 150+ conglomerates in five continents recruit How can we help yours?