How can you improve inventory planning for better retail performance?

Understanding demand patterns is crucial for effective inventory planning in retail. Analyze historical sales data, identify seasonal trends, and consider external factors impacting demand. Utilize advanced forecasting techniques and technology to predict future demand more accurately. This insight allows for better inventory management, ensuring that stock levels align with expected customer demand, reducing excess inventory or stockouts and improving overall operational efficiency.

Well following the same old fashioned way of approach looking into the same data may drive the results as per the prediction but if one really wants to supersceed the achievable limits then one has to think out of the box I learnt very recently that one of the giant food delivery app in their mid stage of sales growth with standard data analytics took a surprising turn by analysing the localisation which has more sales of washing machines by correlation of ease of house hold chores to food getting delivered and took a leap achievement due to the new analysis and expansion was driven on the selected localities which resulted in a way better results than normal analysis tactics hence let's think OUT OF THE BOX.

All the topics in this article is most relevant to success. If their was a “Silver Bullet” answer, I guess their would be no need for this question In my opinion different skill sets for different environments The key is to get the system and skill sets to match your needs as well as that of your clients

Understanding demand patterns is indeed crucial for effective inventory planning. 1. Analyze historical sales data to identify patterns, trends, and seasonality. 2. Examine sales performance over different time intervals (daily, weekly, monthly, seasonally) to understand recurring patterns. 3. Classify items as fast-moving, slow-moving, or seasonal to tailor inventory management strategies accordingly. 4. Consider the impact of promotional campaigns on demand.

Optimize demand forecasting, implement data-driven inventory management strategies, and enhance supplier relationships for improved retail performance.

One of the greatest challenges in optimizing inventory is not to make the retail store operations slower or difficult. Specially in some categories, even the floor replenishment can be tricky as to have all the products with available stock dispalyed. However, the use of technology has become more accesible and flexible to help retailers overcome this challenge. There is one retailer specialized in women shoes which floor exhibit has more than 2,000 pairs. He is able to replenish the exhibit twice a day in less than 20 minutes with the aid of RFID technoogy. New arrivals are exhibited same day. But the most impresive thing was the speed of bringing a shoe size to a customer. Inventory control and customer experience at its best.

I see first step to control inventory is first to maintain the relevant parameters that can define and categorize inventory from fast moving to slow moving and stocking policies if it’s MTO or MTS and those parameters must be reviewed and updated periodically as their demand pattern changes or as per their life cycle. Another 2 important parameters to be defined in the way that can achieve inventory targets are Safety stock for MTS and supplier Lead Time VS Customer service level. Inventory performance must be measured concerning movement and inventory cost like inventory turnover and inventory carrying cost.

Implementing inventory control methods is essential for efficient retail operations. Utilize techniques such as ABC analysis to prioritize items based on their importance, set reorder points to trigger timely restocking, and establish safety stock levels to buffer against uncertainties. Regularly conduct cycle counts and use inventory management software to track and manage stock in real-time. These methods enhance accuracy, reduce carrying costs, and contribute to a more streamlined and responsive inventory planning process.

Two key factors are lead time or time taken to replenish coupled with predictability of demand. If lead time is minimal and demand is predictable then managing inventory levels is quite straightforward. Simple re-order point methodology will work. Conversely, if lead times are extended and demand is less predictable, more science needs to be applied in order to predict and manage inventory requirements, utilising sophisticated inventory modelling tools.

Start with basic Daily Stock Count, Identify Fast Moving, Moderate & Slow Moving SKU, stacking and staging accordingly. Control Inward (GIGO : Garbage In, Garbage Out) Inventory Ageing, Reordering

Proper inventory planning is essential for retail performance optimization. By consistently monitoring and evaluating inventory performance, retailers can identify areas of improvement, streamline operations, minimize costs, and ensure customer satisfaction. Implementing strategies focused on monitoring and evaluating can lead to effective inventory planning and overall retail success. Conduct regular Inventory Audits is key.

Atualmente há inúmeras possibilidades de uso de ferramentas diversas de tecnologia e integra??o, que podem ser úteis na análise e constru??o de cenários. Com o uso cada vez mais frequente de ferramentas de inteligência artifical, e dado a enorme disponibilidade de dados e informa??es, atualmente já é possível, realizar cruzamento de dados diversos, e buscar a melhor compreens?o do cenário, em especial criando possíveis cenários e planos de a??o. A exemplo, se a previs?o do tempo dos próximos dias é de forte sol e calor, muito possivelmente em lojas de varejo, as vendas de produtos como sorvetes, refrigentes, dentre outros possívelmente será maior, possibilitando uma análise e elabora??o de cenário de maior venda e vice versa.

In many brands that I have worked with the best way for leverage the technology on hand is by doing consistent and weekly cycle counts on specific categories or products. These "mini" inventories are a great investment to avoid surprises and also to manage shrink at a weekly basis rather than quarterly. RFID systems make fast work of this however, in more archaic systems this can be done in an Excell worksheet by imputing scanned data and comparing it to active inventory. All in all leading to effective inventory management and a extreme reduction in shrink.

We are in a time where people are using e-commerce at an increasing rate. In person retail is becoming harder to find what you need when you need it. E-store can focus inventory to a singular location to distribute the target area. Same day service and delivery on the most common everyday items we often have a hard time finding on the shelf of the big box store.

Communication with suppliers is one of the key factors for inventory planning, this will not just contribute to the stock availability but as well as the cost for logistics and SKU’s. In my experience as cost is one of the challenging part of inventory management we often work out a win win solution with our supllier.

In My experience I see collaboration and information sharing is crucial for extended supply chain success. CPFR (collaborative planning, forecasting, replenishment) is one of the concepts to achieve distribution integrative intensity, for example sharing forecast with suppliers for visibility of future demand can secure customer service level. And also integrating the customer in the planning phase is important for forecast accuracy and inventory optimization. Another approach is to rely on end customer demand in planning rather than intermediaries as that may cause bull-whip effect.

Atualmente já há softwares denominados CBM (Consumer Behavior Management), uma evolu??o dos CRM, que podem integrar ferramentas de IA, Data Analytic, big data entre outros, e a integra??o dos dados obtidos, além de muito salutar, pode render a empresa, valor monetário ou até mesmo estratégias de pre?o ou premia??o, por parte da indústria, que atualmente necessita de vasta e interessante análise do desempenho de seus produtos, frente a concorrência, assim como para fins de planejamento e excu??o de suas demandas produtivas.

For retail environments explore the possibility of implementing vendor manager inventory (VMI). The vendor is then responsible for replenishing inventory and payment for inventory may be delayed until it is sold which reduces costs. The vendor benefits from securing real estate within the stores and having the freedom to promote the items they believe will most suit the local demographic.

Communication with suppliers is one of the key factors for inventory planning, this will not just contribute to the stock availability but as well as the cost for logistics and SKU’s. In my experience as cost is one of the challenging part of inventory management we often work out a win win solution with our supllier.

1. Feedback and suggestions from customers regarding services provided to them, by the retailer, in in digital mode. 2. Customer reviews regarding product quality satisfaction and customer support provided. 3. Feedback from the customer regarding non-available items, with brand and quality, which help in market survey. 4. Data analysis of all the feedbacks and reviews. 5. Always update with latest technology, like now a days AI is performing leading role.

Como minorista tienes tres importantes restricciones. 1. Capital 2. Espacio 3. Tiempo Puedes ser un grande, mediano o peque?ísimo minorista, pero si esta es tu condición, estos tres aspectos son claves. El capital debe ser aprovechado y tener un alto inventario en valor no es un negocio por lo que se adquiera/produzca como mercadería debe ser rápidamente liquidado. En la rotación de capital estará tu margen. Puedes tener todo el espacio del mundo, pero ese espacio CUESTA y si quieres ser rentable y no sucumbir a la competencia debes OPTIMIZAR. Si bien debes cobrar lo que vendas lo antes posible, debes entregar lo que vendas lo antes posible. Siendo que la ya vimos que la velocidad es clave. El denominador es la llave PARA CADA CLIENTE.

Don’t feel like you have to reinvent the wheel every time. Use what works, that is tested and perfect it as a baseline. Once you have achieved that mastery you can begin to try unique ideas. No idea will work if you cannot execute at a high level.

Forecasting by Inventory Planning is great, however, the ability at Store Level to increase or decrease forecasting has been taken away by many companies. Store Level Management knows their own shopping patterns the best (they should!!) and this loss of Inventory Control at Store Level is detrimental to Sales and Service.

Además de lo mencionado en las categorías, definir parámetros de rentabilidad, niveles de inventarios, límites de compra, niveles de flujo de efectivo, entre otros, para además de ayudar en la planeación, mantener unas finanzas sanas... Saludos :)