How Can Retailers Overcome Inventory Management Complexity?

In today’s retail world, one question towers above the rest: “Where is my product?”

At Manhattan’s annual customer conference, retail and supply chain leaders gathered to tackle this very question. Between unpredictable global events, shifting consumer expectations, and the rapid evolution of technology, inventory visibility has moved from being a “nice-to-have” to an absolute necessity. This discussion, featuring industry experts Darryl Aldridge, VP of Inventory at Floor & Decor, Alan Erera, Senior Associate Chair, Industrial and Systems Engineering at Georgia Tech, and Mandar Rahatekar, Senior Director of R&D at Manhattan, shed light on why the stakes are higher than ever, and what retailers can do to stay ahead.

Supply Chain Surprises: From Barges to Airplanes

The past few years have proven that disruptions are no longer rare; they’re routine. Aldridge recalled having to move product on a barge after a bridge collapse in Baltimore, while Rahatekar shared a challenge at a previous role where the adjustable bed bases had to be airlifted from Asia to the U.S. in just six weeks - products so heavy they should never be on a plane.

These stories highlight a bigger truth: retailers are constantly juggling global disruptions, from pandemics and tariffs to port congestion and strikes. To avoid chaos, knowing exactly where your product is at any given moment is more critical than ever.

Planning in an Age of Uncertainty

When there are breaks in a supply chain, is it poor planning, broken infrastructure, or sudden change in consumer demand that’s to blame? The answer oftentimes is all three.

Aldridge noted that longer planning times mean even small hiccups can cause ripples across entire product categories. If one container is late, it’s manageable. But multiple delays across multiple containers over a short span quickly spiral into customer dissatisfaction and lost sales.

Erera emphasized that even the best planning tools come with limits. Forecasting demand is already difficult. Add in the complexities of modern commerce and even advanced analytics struggle to keep up. Yes, scenario planning helps, but only if disruptions can be predicted or detected early.

That’s where visibility becomes essential. The earlier retailers know there’s a problem, the more options they will have to respond accurately.

The New Consumer: Demanding and Data-Driven

Consumers today are unpredictable. They expect wide assortments, immediate availability, and easy returns, and they do not see channels the way retailers do. Whether shopping online, in-store or via social media platforms, they want a consistent, seamless experience.

Rahatekar pointed out that returns – once an afterthought – are now overwhelming retailers. Products flow not just to distribution centers and stores, but back from customers at record levels, creating mismatches between SKUs, discontinued items, and lot variations. Reverse logistics is now its own stream in the complex world of supply chain commerce.

For retailers, this means not just tracking inventory as it moves forward but also building systems to handle the increasing tide of products moving backward.

The Small Retailer Dilemma

While large retailers like Floor & Decor, with hundreds of stores and sophisticated systems, can weather many storms, can the same be assumed for smaller players? Rahatekar believes the answer lies in collaboration. Mid-sized retailers should tap into ecosystems where data is democratized and shared. If a ship is delayed at a port, every retailer should be able to see that signal and adjust accordingly.

With cloud technology and APIs making integration easier than ever, the real challenge isn’t access to data but making it usable within day-to-day workflows.

Data, Agents, and the Magic Wand

Even when data is available, it’s often messy. Search algorithms, irrelevant clicks, or false demand signals can obscure the picture and be counterproductive. Rahatekar mentioned that the future isn’t just about gathering more information; it’s about filtering out the noise.

Discussing the role of artificial intelligence (AI), Erera and Aldridge highlighted that automated “agents” – AI systems that scan, detect, and even act on disruptions – can prove to be a promising frontier. Instead of relying on humans to sift through endless reports, these digital agents could trigger immediate actions like rerouting shipments, reallocating labor or switching suppliers, to drive higher responsiveness and efficiency.

But here is the caveat - if the data feeding these agents is flawed, the results will be too. Cleaning and curating demand signals is just as important as building smarter tools.

Agility Over Perfection

One theme echoed throughout the conversation: agility is more important than perfection.

Retailers can’t predict every tariff, strike or viral TikTok trend that drives sudden demand. What they can do is prepare systems and teams to pivot quickly. They must be capable of forecasting with flexibility, building contingency plans, and empowering store associates to redirect customers when products run out.

As Aldridge put it, “You’ve got to have the right forecast and the right lead time. If those two are wrong, you’re going to have a world of problems.”

How can retailers overcome inventory management complexity?

So where should retailers start if they’re feeling overwhelmed by the complexity of inventory management today? The panel offered three key takeaways:

1. Start with a plan - Aldridge stressed that you can’t just “buy everything” and hope it works out. Build realistic forecasts, factor in lead times, and avoid overstocking that erodes profitability.
2. Invest in visibility tools - Errera emphasized that visibility isn’t optional. Retailers must be able to see where shipments are, identify disruptions early, and respond before problems hit the sales floor.
3. Simplify assortments - Rahatekar suggested rationalizing product offerings. With tariffs, shifting supplier bases, and growing return volumes, retailers should ask hard questions: Do we really need all these SKUs? Streamlining assortments can free up resources and reduce waste.

The Road Ahead: Unified Supply Chains

According to the subject matter experts, ultimately, the holy grail is a unified supply chain. A system where all applications operate on the same cloud-native platform and where players, big or small, can see, share, and act on the same signals.

We’re not there yet, but advances in AI, automation, and connected data ecosystems are moving the industry closer. The winners will be those who can balance cutting-edge tools with smart strategies, using technology not to replace human judgment, but to amplify it.

As the discussion made clear, the days of flying blind are over. Inventory visibility isn’t just about logistics, it’s about survival, customer trust, and profitability.

In 2025 and beyond, getting the right product in the right place at the right time depends less on gut instinct and more on data, agility, and collaboration. For retailers, inventory visibility isn’t just an operational advantage, it’s the foundation for resilience in an unpredictable world.

To view the entire discussion, please click here.