Ask any retailer why POS data is important, and they will tell you that it helps them identify their true demand. That is, the data retail businesses immerse from their sales helps to identify the actual need for their products and services. 

But many retailers forget the impact demand has on the supply chain: the bullwhip effect. When too much focus is placed on the demand side of production, the changes between intermediate partners (Chinese whispers and communication challenges) cause inventory fluctuations at the end of the supply chain that unbalances the entire supply chain schema. 

As a result, you get an overstock or understock of supplies that end up as back order or deadstock. So then, how do you protect your supply chain from this bullwhip effect? Believe it or not, POS data can help your suppliers meet your retail demands accurately.

More than that, it can streamline the process of production planning by enhancing visibility, reducing the noise from seasonality and trends, and placing your focus on accurate reorder points. POS data gives the entire supply chain a complete sell-through picture, making the decision-making process more transparent and favourable for ROI. 

Why Is Data Important In Supply Chain?

The supply chain affects every aspect of a business, be it sourcing raw materials or enacting business marketing activities. Data streamlines the communication between these processes, thus breaking the effects of the Chinese whispers. 

POS data specifically does this by creating a free flow of information and communication from seed to sale. This is how:

It Helps You Make Better Staffing Decisions

Your employees are your most important resource because they represent you and your business in your absence. And like any business resource, you can utilise your employees to give you the best performance. This is where POS data comes in.

Modern POS solutions are powerful employee management tools that immerse all your employee data, like the time they clock in, stock-taking capabilities, sales, commissions, and bonuses. Collecting this data type gives you the aptitude to assign tasks to your employees from an informed perspective. 

For instance, if you notice that some employees are quicker at taking stock than others from your employee data, assigning them to the warehouse operations in your supply chain ensures your workflow works more effortlessly. Suppose you realise that some employees prefer dealing with customers directly than spending time on back office tasks. 

In that case, group them and assign them tasks that deal with immediate customer interactions. This can be your support system operations or your flagship retail store operations. In seasons where product demand is high, your best-performing employees will ensure you don't miss a sale because of delayed output or human errors. 

And your POS data quickly tells you which employees fall under this category. If you have slacking employees, the data will identify them too, and you can set about finding solutions that motivate your employees to give their best performance. 

POS systems can also help you set realistic goals for your employees and create additional incentives like best-performing employee gift cards, promotions, or reward points. Using POS data allows you to make the best staffing decisions to run your retail supply chain operations more effortlessly. 

It Enhances Your Customer And Product Insight

POS data stores your complete order history, product demands by season, and sales trends year in and year out. Your data will tell you which of your products are quickly moving from your shelf and your slow-moving inventory. 

It will also tell you how long each product stays on the shelf, how much it sells, and how quickly you can restock your products. Why is this POS data important? First, it helps you understand your customers. 

That is, you get to know what products they prefer to purchase, which products are seasonal, and which products only attract a select type of customer. Therefore, you start to become more selective about your inventory choice since you focus on products with an ROI. 

Second, balancing your inventory becomes a seamless process because POS data makes forecasting for supply easy and convenient. Think about it: if you know that you have product x in your warehouse, it takes one week for the entire stock to sell, and your suppliers can restock it within 24hrs, you can quickly plan for replenishment before you run out. 

Also, you avoid overstocking your products simply because there is a slight rise in demand, which helps you avoid overstocking and deadstock. Lastly, your inventory management processes become more streamlined. 

Automating inventory processes like stock taking, product returns, and stock transfers allow you to optimise your product catalogue. This, in turn, helps you to reduce stock shrinkage and increase your sales revenues. 

Consequently, you improve your customer satisfaction because you provide the products they need when they need them without fail. The long-term effects are customer loyalty and more sales revenue through referrals or word-of-mouth marketing. 

Add Convenience To The Supply Chain 

When forecasting demand becomes easy, it reduces the standard uncertainty within a traditional supply chain. As a result, supply chain players can estimate demand accurately and without guesswork since they have the correct data to guide their movements. 

Additionally, the POS system's automation reduces most of the manual labour supply chain workers deal with daily. For instance, the POS system provides purchase order reports almost instantaneously, a task that would take hours to complete manually. 

Also, POS data is comprehensive but very simple to interpret and understand. This information is what you need to develop strategies that help your business grow. For example, with just a few clicks, you can pull your entire year's sales data and study your daily, weekly, or monthly sales output through charts or tables. 

Such data make it easy to identify changes in demand, an insight you can use to make product changes, study your competitors, and identify the new marketing trends you might need to adopt to increase sales.

So, why is POS data important? It collects valuable information you can use to steer your retail business toward exponential growth. A simple example is using POS data to collect valuable information about your customers and then creating product packages that turn ordinary customers into loyal repeat customers. 

You can also identify your ideal customer and focus all your supply chain efforts on meeting their specific needs. POS data will give you actionable data that allows you to promote your retail business. 

Leverage POS Data For Supply Chain Management

POS data is essential because it goes beyond helping you determine your true demand. Instead, it also allows you to make more intelligent supply chain decisions. This way, you have an active tool helping you overcome any challenges within your supply chain. 

For instance, when customer orders start to fluctuate, instead of assuming that your fill rates will reduce, you can use POS data to determine your actual fill rate and customer inventory demand. You might be surprised to find a steady fill rate despite the fluctuating market. 

With all that in mind, consult with us for free or get a free demo on how our Erply POS solution can gather all your retail data and help you streamline your supply chain and, therefore, customer demand optimally.