Supplyve is an Israeli startup that enables small retail stores to take control of their supply chains. Co-founder and COO Dvir Goldman spoke with me about common inventory management challenges that store owners face and how Supplyve’s solutions can help.
Before founding Supplyve, I was managing a small business in Jerusalem. Prior to that, I had significant experience working in and around retail. When the Covid pandemic hit, supply chains all over the world were in distress. My business was spending countless hours handling orders, counting inventory, and trying to get suppliers to bring us the right inventory, and many times it just didn’t happen.
I started speaking about this with my friend (and now partner) Joey, who studied supply chains at university and had some experience in this field. We were trying to figure out whether this was a common problem, and so we spoke to about 100 independent retailers both in the US and Israel. Our research confirmed that managing inventory orders from suppliers is a massive issue that became even more urgent during the pandemic.
We live in a world where items sell online as well as in stores, so you not only have to manage what physically enters and leaves your store, but also from a technological perspective, record what’s leaving the store through multiple channels. That comes on top of still having to manage tens of suppliers, depending on the size of your store. The average American supermarket has about 25,000 different items in stock.
What’s most striking is that, despite the clear need, independent retailers generally fail to adopt ordering or inventory technology on a storewide basis. We found that 93% of retailers generally still use paper and pen or, at best, Google Sheets, to manage ordering and inventory. Despite the obvious and acknowledged need on the part of the retailers for technology, they often refuse to adopt it – the reason being that technology today is extraordinarily labor intensive to utilize. For example, a small store of 10,000 different items would take more than seven full 24-hour days of typing in and recording the product descriptions of said items, just to get set up. Not to mention the updates that come with incoming inventory, spoiled inventory or changing prices, which can also take hours to update daily.
As a result of the challenges facing independent retailers and the relatively untapped potential of the market, we decided to focus on small chains and standalone stores. We started developing an app that enables stores to easily record incoming inventory from different suppliers and send out orders in a much easier way, directly to them.
A store might have 30 suppliers, each working with a different ordering system: a phone call, a list on WhatsApp, a spreadsheet, a web form, or an actual person who comes to the store, counts the inventory and creates an order accordingly. The disorganized nature of ordering makes it very difficult to manage, and Supplyve helps to make it all simpler and easier.
We have a very interesting backend that utilizes a lot of complex data sharing between users to make their lives easier. In short, we’ve essentially removed the need for manual data entry.
The other key attribute of Supplyve is the ease of use. I think the current Enterprise Resource Planning (ERP) systems that are out there are very difficult to use. They're designed very well for certain things but when it comes to recording and inputting information, which is the vast majority of what you do with ERPs, I don't think they’re doing a very good job.
Manually inputting the items from each of your invoices into your system can be terribly time-consuming. We're creating our tools in a way that makes it a lot easier. We're also using tools like advanced OCR and machine learning algorithms to help with a bunch of different functions that make our system very easy and usable but also very effective at reading certain information.
For example, we have an invoice scanner where you just scan the invoice and it uploads all the information from that invoice into the user’s system. That's where we differentiate ourselves from other players.
To reiterate, while most point-of-sale systems have some type of inventory management component built into them, they're often underutilized because you need someone to manually type in every item you receive, including price points, expiry dates, product data, and supplier data. Doing that for 200 different items every single day would take hours and hours of work that you either have to do yourself or hire someone to do.
What often happens is that people choose to neglect this part of the business, which ultimately leads to a whole host of problems. Nobody wants to spend three hours a day managing their finances, but if all it takes is five minutes, then they will. That is the challenge that Supplyve is trying to solve.
We apply AI in our invoice scanner to be able to map text fields from differently formatted invoices. When each supplier has its own invoice format, it makes it very difficult to pick up the data from those invoices, so you need a system that’s all-encompassing and tailored to a bunch of different formats and labeling methods, like Supplyve.
Some suppliers might have universal product codes (UPC) on their invoices, others only have a local code or a store code that’s either numeric or alphanumeric. So, our main use of AI right now is cleaning all of that up, which is a pretty massive effort.
Most supermarkets use Electronic Data Interchange (EDI) where, with just a few clicks, they can send and receive orders and perform quick actions. Smaller stores aren't yet doing that. They're working with paper invoices, emails and spreadsheets. Frankly, not all larger suppliers are doing that either.
The world of ordering and managing your suppliers is changing. You need to know what you have to order and what's on your shelves at any given moment. Currently, this requires a massive amount of manual work on an individual basis. Specifically in the world of food supply chains, it could solve multiple problems for many different parties, as it would create a lot more predictability and flexibility for everyone involved.
I would advise them to imagine new possibilities in terms of their technology stack. Running your business should be as simple as opening Facebook or managing your email. Today, the vast majority of ordering or inventory options demand intensive effort.
I ask store owners to imagine a world where they can enter their ordering dashboard and see exactly what, when and how much they should order. Where they get an alert when a product is running low and where ordering is as simple as taking your phone and scanning the product you want to restock.
Ultimately I would advise retailers to find technology that makes their lives easier.
I think we’re going to see a lot more collaboration between companies. Ultimately, the companies that collaborate are going to be the ones that succeed. We’re seeing massive companies like Square and Clover, which have open-source APIs to connect with a million smaller point-of-sale systems. The ones that succeed seem to be the ones that offer easier integration with other platforms.
I think businesses are now a lot more aware that they have to start moving forward because the ecosystem of suppliers and consumer purchasing habits has become a lot more volatile.
If you want to get products in your store by a certain time, you have to demand them. To do that, you first need to know what you should be demanding, which means you have to have a much better handle on what's actually in your store, what you should be buying, and how you should be planning ahead.
Large supermarkets are able to do this because they have supply chain managers and procurement managers for different branches. They have a lot of people whose job is to specifically manage the incoming and outgoing items in their inventory and overlook the ordering process. Small businesses and franchises usually can't afford that, but are desperately looking for technology solutions, and that’s where Supplyve comes in to help make things easier.