DIY Inventory Management
Gourmet Retailer:
Have you ever run out of the latest ‘must-have’ kitchen gadget or specialty food item right in the middle of the busy fourth quarter? Find yourself stocked to the gills with wire whisks yet not enough organic coffee or tea? This fine line between keeping too much inventory and not enough is a common concern among retailers. And in today’s competitive environment, retailers can’t afford to lose a sale — and a loyal customer — due to unavailability of merchandise. Proper inventory management plays a central role in every retailer’s need to satisfy customers.
In a literal sense, inventory refers to stocks of anything necessary to do business. These stocks represent a large portion of the business investment and must be well-managed in order to maximize profits. In fact, many small businesses cannot absorb the types of losses arising from poor inventory management. Unless inventories are controlled, they are unreliable, inefficient and costly.
At the same time, excess inventory can lead to costly markdowns, storage issues, obsolescence, product expiration, inflated shrinkage and spoilage of perishable items. And this unsteady balance between inventory and service levels will only continue to grow in complexity as the number of SKUs, supply sources, seasonal collections, promotions and product characteristics continue to skyrocket every year.
One of the most important aspects of inventory control is to have the items in stock at the moment they are needed. This includes going into the market to buy the goods early enough to ensure delivery at the proper time. Thus, buying requires advance planning to determine inventory needs for each time period and then making the commitments without procrastination.
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