Out of Stock, Out of Luck: How Poor Availability Can Kill Your Business Success

If your business is built upon service, then it's fair to say that stock availability is a key ingredient of any proposition.

Yet the consistency of range and stock management can be found wanting - an interesting paradox of balancing working capital and service excellence.

With challenges for the trade around time on site, traffic congestion, and digital fulfilment, is your product availability up to the test or is it a silent killer of your business success?

In this article I explore 3 areas that I see as business critical for success:

• Credibility
• Project not product
• Digital fulfilment

Let's start with credibility.

Credibility

Have you ever visited a branch or store that has a lot of gaps on the shelves? Or equally as frustrating, they didn't have enough stock to cover what you needed to buy?

You see, there's having the right range, then there's having the right stock of that range. You may not need pallets of every item, but you need to be credible.

As an example having pallets or dump stacks of your best selling lines will ensure you're never out of stock - ever, and try to avoid having singles of even slow moving lines. Nobody wants to see 1 tube of sealant sat lonely on a dusty shelf!

This isn't a closing down sale - so ensure you don't look that way to your customers, who remember, rely upon your business as an extension of theirs.

Try using a ratio of 3:1 for sales to availability. This means for every 1% change in availability you impact sales by 3%.

Project not product

Building on from credibility, thinking project not product is closely linked. It may sound obvious, but if you only have 7 out of 10 items needed to do a job then you can't fulfil the needs of your customers.

What's more, it's highly likely that the customer will source not just the 3 items they needed that you couldn't provide, but potentially the whole order. If they do that well and get looked after, they might just stick with that new supplier too!

Your customers will expect you to have their "destination" products, but they'll also expect you to keep those range completers or convenience lines too, as remember time is money for the busy tradesperson.

Digital Fulfilment

The building industry continues to change, and of course with so many goods and services sourced online in other industries, customer habits have been changing for some time too.

With ranging often tailored to suit local customer requirements, bricks being a good example, blending your offline and online offer can be tricky.

Yet customers expect to have a seamless customer experience regardless of how they choose to interact with you. This means getting your range, and stock availability, right in branch, store or warehouse so that it's accurate online.

Imagine a customer ordering through your website, perhaps for a click and collect, only to turn up and find the stock wasn't there in the first place? Now that's not a winning formula!

Tips for Success

Whatever market your business chooses to serve, your range is a window into how successfully you can look after your customers.

How do you manage range in your business today? Is it controlled, or left to chance? Is it measured and reported on to ensure you always have what your customers need?

When I say measured and reported on, I don't mean do you have 1 bag of cement, I mean do you have 10 pallets in stock every day? Real credibility available to serve your customers.

You may be surprised at how often you don't have what you think you have, and therefore how many lost sales are being created for both those products and the wider project items.

If you're wondering how to put a number on it, try using a ratio of 3:1 for sales to availability. This means for every 1% change in availability you impact sales by 3%.

If you're producing ￡10m in sales by running at 85% availability, improving to 90% could increase sales by 15% to ￡11.5m! That's powerful stuff.

You have also moved your product availability from being a silent killer to the lifeblood of your business success.

About K Wright Consultancy

We work with businesses who are serious about investing in their supply chain. Why? We are professionals and want to help you win.

Leveraging 30+ years of procurement expertise we’ll unlock your hidden profit potential.

Whether you’re a business owner, leader, or entrepreneur, we simplify procurement without adding unnecessary complexity or costs.

Professional procurement consulting for businesses serious about making a material difference to their supply chain.

Visit www.kwrightconsultancy.co.uk to find out more