The Ins and Outs of the Inventory Record Accuracy Formula
Welcome to Herb’s Hot Takes! Tyler Kern and Herb Billings, VP of Product Strategy at Datascan, dive into the world of record accuracy formulas. They discuss various options and how they differ, including the percentage of SKUs with accurate counts, the absolute difference formula, and the Symmetric Mean Absolute Percentage Error (SMAPE) formula.
For RFID-based retailers, weekly counting equals high accuracy levels, which makes the percentage of accurate SKUs a suitable formula. Barcode retailers benefit from the absolute difference formula, which provides more information about the distance from accuracy. SMAPE is an improvement–it assigns values to each variance and considers the impact of different unit variations.
The conversation highlights the importance of record accuracy in the context of omnichannel retail. With the rise of omnichannel experiences, accurate inventory records have become a key performance indicator for retailers. Improving record accuracy leads to increased sales, especially when combined with counting stock more frequently. Inventory accuracy is crucial for product availability and omnichannel success.
Implementing these formulas in retail requires clean data, as poor data quality can affect accuracy calculations. Scrubbing data and maintaining accurate records is a constant challenge, but it is essential for inventory record accuracy. Inventory record accuracy has gained importance in retail to the point of becoming a sales strategy.