Market segmentation is a competitive advantage to compete with and beat big companies in inventory optimization, small companies can leverage the following factors based on the information provided:
- Cost of Implementing an ERP Solution:
- Then: In the past, implementing an ERP solution was a tedious and expensive process. The initial hardware costs were prohibitive, and specialized computer rooms were required to maintain the systems.
- Now: Today, computer hardware has become more powerful, energy-efficient, and upgradeable. Laptops and tablets have replaced outdated terminals, and plug-and-play functionality allows for easy setup. The cost of implementing ERP solutions has decreased significantly.
- Software:
- Then: Development software languages were rudimentary, difficult to program, and prone to bugs when code updates were made. Time to implement software solutions was measured in months or even years.
- Now: Off-the-shelf software solutions are readily available, extensively tested, and debugged. Additionally, the rise of no-code solutions has accelerated implementation times to hours or weeks.
- Implementation of ERP Solutions for Inventory Control:
- Then: Setting up a company for computerization was a challenging task, and there were trust issues with the output of computerized reports.
- Now: Strategic inventory information can be obtained from cash tills, bypassing the need for a sophisticated ERP system. Reports can be generated outside of the company’s computer infrastructure, providing accurate data without relying on the IT department.
- Analysis:
- Then: In the past, analysis was performed using manual methods such as 14-column analysis pads or error-prone spreadsheets.
- Now: With improved technology, spreadsheets still have a place in financial departments, but more advanced tools can be used for inventory analysis, avoiding inherent problems and increasing accuracy.
- Inventory Analysis:
- Then: Generating and running reports required IT resources and the involvement of the computer department, often busy with troubleshooting.
- Now: Data for inventory analysis can be extracted directly from point-of-sale solutions (electronic cash tills) without IT department involvement. The data is accurate, clean, and the cost of running reports is affordable.
The Major Difference between Big and Small Companies:
- Big Companies: Big companies often struggle to embrace a culture of experimentation and accepting failure when trying something new. This can hinder their ability to adapt and optimize inventory processes.
- Small Companies: Small companies, by nature, are more agile, risk-tolerant, and have an entrepreneurial mindset. They can think outside the box, experiment, and adapt quickly, giving them an advantage in inventory optimization.
Market Segmentation Summary
By leveraging advancements in technology, cost-effective solutions, and a culture of innovation, small companies can compete with and potentially outperform big companies in inventory optimization.
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