6 Steps for Improving Inventory Productivity
By Jim Lewis, CEO Enhanced Retail Solutions LLC
We often hear from prospects that they have a good handle on planning. Yet if we get the opportunity to work with them, almost immediately we uncover a significant amount of stagnant inventory, missed opportunities due to slow reaction and a lot of reporting that takes enormous effort to create but gets little use. It’s usually because of a lack of expertise, disciplined process or the right tools. All three are necessary to manage and plan inventory properly- especially given all the factors affecting the supply chain and the retail landscape.
With inventory the biggest capital investment it’s what makes or breaks a retailer or wholesaler. One must laser focus on each stage of product’s lifecycle to ensure it all makes sense. These 6 steps offer a starting point to not just improving inventory productivity- but educating your team and making them smarter and better decision makers.
- Optimize the Gathering, Managing & Interpretation of Retail Data
Companies are spending a fortune collecting data but don’t know how to make good use of it. Step 1 is ensuring you have clean data, integrated POS, ERP, PLM or other 3rd party data that is important to your business.
- Implement Discipline of a Planner
Formalize your planning process by outlining weekly, monthly, quarterly, ad-hoc, pre-season and post season tasks. Learn what KPI’s are important and what is considered good or bad for your category. Contact us and ask for a copy of our Discipline of a Planner- it’s free.
- Focus on Opportunities & Liabilities that Would Otherwise Go Unnoticed
Build action-oriented dashboards & reports that each have a specific theme- like monitoring troubled inventory or checking for changes in rate of sale by SKU by store.
- Smarter Forecasting and Item Planning
For both on-line and brick & mortar automate a POS forecast, then back it into inventory- both retail and wholesale. You need visibility to inventory throughout the entire pipeline.
- Habitual SKU Rationalization
Constantly monitor performance and label the low hanging fruit. Score your previous buys- did your big bets work out? What is the optimal number of items that enable profitability for you?
- Automate Vendor Managed Inventory
In today’s environment you can’t afford to miss a sale on anything- yet you don’t want a mountain of inventory. Collaborate and double the resources with more eyes and technology on every SKU-store.
Inventory management isn’t just for companies that are in trouble. In fact, it is vital to healthy companies, so they don’t get in a trap where resources are tied up in unproductive inventory and sales decrease.
Enhanced Retail Solutions is a service-oriented business with the goal of helping retailers, suppliers, distributors and brands achieve greater sales, profit and inventory productivity. We do this with a combination of old-fashioned hands-on personal consulting and 21st Century technology.