Tag Archives: Inventory

Supply Chain News: Retailers Rethinking Inventory Strategies

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Are we starting to see new thinking in retail relative to inventory levels?

The reality is that somewhat under the radar, retail inventories have been rising. The inventory-to-sales (ITS) ratio measures the amount of inventory held as a percentage of one month’s worth of sales. As can be seen in the chart below, while the retail ITS is highly seasonal, the trend since 2010 is definitely up. Now, some stores are once again trying to slay the inventory beast.

For example, Tom Shortt, Home Depot’s senior vice president of supply chain told the Wall Street Journal his new message to the stores is “Get comfortable with days of inventory, not weeks.” The retailer is targeting sales growth of nearly 15% by 2018, but wants to keep inventory levels flat or slightly down – quite an accomplishment versus how retail has historically managed sales growth and inventories.

It is a shift happening across the retail sector, as companies try to figure out ways to profitably serve the growing needs of on-line shoppers while making their networks of brick and mortar outlets generate more cash.

“Chains must predict whether demand will come from the internet or a store visit, and whether they’ll ship online orders from a distribution center or a store,” the Wall Street Journal noted. “Every move of inventory is an added cost that eats away at already thin margins.”

As we reported in the Retail Vendor Performance Bulletin recently, Target stores announced earlier this year it was replacing its existing forecasting and replenishment software with in-house developed applications to manage the complexity of inventory deployment and fulfillment across its omnichannel network.

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Close the Loop on Supply Chain Risk: 5 Strategies to Move Product, Boost Sales and Automate Efficiency

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Supply chain management is a critical function for any small to mid-sized business. Yet, too often companies rely on spreadsheets to manage supply chain activities — a risky prospect that’s labor-intensive and error-prone.

A better option is to bring these activities into your financial management or ERP system. Centralizing tasks such as order filling, inventory management and delivery tracking can positively impact sales, improve cash flow and keep you tax compliant.

Here are five ways that ERP supply chain management benefits your bottom line.

Right-sized Inventory

Getting inventory right can be tricky: too low, you risk losing customers; too high and you’re left holding the bag, so to speak.

Control Quality

Dealing with defective materials or products can be a drain on your business. Not only can it hurt sales, but it can also damage your reputation.

Optimize Shipping

Web sales have made fast, affordable shipping a must-do for all businesses. Keeping track of goods coming and going can become burdensome, not to mention the hassle of dealing with lost or late shipments.

Improve Cash Flow

Invoicing practices can greatly impact your cash flow. Moving from a manual process to automation allows you to process invoices faster and shorten the order-to-cash cycle.

Be Compliant

Navigating complex and ever-changing trade and tax rules can be daunting. Being part of a supply chain compounds that risk.

 

Read more at Close the Loop on Supply Chain Risk: 5 Strategies to Move Product, Boost Sales and Automate Efficiency

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Inventory Analysis: Affordable, Available, Actionable

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Inventory Analysis: Affordable, Available, Actionable

For any manufacturer or distributor, the problem with inventory management is easily stated. Simply put, there’s often too much of the stuff that isn’t selling—and far too little of the stuff that is selling.

The result? Disappointed customers, stock-outs and lost sales—combined with shelves groaning with inventory that nobody wants.

Put like that, the mismatch sounds almost comic. But to companies wrestling with just this problem, it’s a quandary that’s very real, and far from laughable.

For in today’s business climate, lost sales and disappointed would-be customers can be very bad news indeed. What’s more, the financial drain of financing unwanted inventory can be crippling. Because while banks are admittedly more willing to lend than they were at the height of the financial crisis, borrowing limits are tight, and terms are expensive.

So what’s to be done?

Inventory analysis: cheaper than ERP, easier than best-of-breed.

Fancy inventory optimization algorithms can help, of course. So can advanced forecasting techniques.
The latter help you to more accurately predict the customer demand that you’ll face; the former help you to better meet those customer demands with available stock.

Inventory analysis: under control, faster and cheaper.

Which is why, of course, so many manufacturers and distributors—especially those with elderly or partially-implemented ERP systems—try the ‘sticking plaster’ approach of spreadsheet-based analysis.

Inventory analysis: self-financing actionable insights.

At Matillion, we know that most of our customers come to us wanting a low-cost, effective Cloud BI solution that can be implemented quickly. And usually, financial reporting and analysis is fairly high on their agendas.

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