Software Tools and Insights for the Global Supply Chain
Friday, July 15, 2016
Spring Cleaning Leads to Summer Clearance...
Now that spring has finally come and gone, many/most distributors are cleaning their warehouses to make room for the latest products and trends. In making space for your new product environment, offloading inventory requires a calculated approach to maximize profits and space.
So since you hopefully did some cleanup and have stuff to move. Here are some helpful suggestions on how to quickly move outdated inventory:
Targeted Email Campaigns and Special Promotions
Use the MDS Targeted Potential Sales Analysis Tools to target existing customers who have purchased similar products and sizes when creating special deals around remaining inventory.
For example, shoe stores or departments with size 8 merchandise can send an email campaign to notify shoppers who previously purchased size 8 shoes. This is an effective way to personalize communications and build shopper loyalty, while selling excess inventory. For the Healthcare space you can use Physican Preference Cards to track purchases by doctor to know the size and type of glove he/she prefers and or any other products to push.
Online Clearances and Pop-up Promotions
Along the same lines, utilize the Remotenet Automated cross-sell to online shoppers when they add to cart or view product information by alerting them of similar items on clearance. Offering suggestions based on the items shoppers are already searching for and viewing will help unload your clearance merchandise. MDS can automatically Create the Overstock and Clearance Items categories on your website based upon Inventory purchase date and onhand vs total amount sold.
Choose the Right Liquidator for Your Brand
If you’ve exhausted clearance and sale opportunities and still have excess inventory to move from your warehouse, you should consider liquidating your stock. It’s important to choose a liquidator that is familiar with your products and works within your industry. In the Healthcare space HidaOverstock.com is a good choice and the MDS System includes a simple Export program to send them the items for review prior to making your deal to sell excess goods.
A strong inventory management foundation makes it easier to move and optimize inventory throughout the year. Excess and slow moving inventory can cause headaches for distributors.
It ties up your working capital and you miss out on the opportunity to use that cash for new inventory. You also under utilize valuable warehouse space that could be used for faster-moving goods, which equates to a heavier holding cost.
Creating a Better Inventory Strategy
So how should we optimize inventory and warehouse efficiency?
One of the first steps is gaining visibility into your inventory levels and understanding which products are slow movers. You should educate yourself on the tools withing your system by using some of the comprehensive reports and analysis on key inventory metrics. Some strategies you might want to look at that are not really unique to the MDS system but can easily be utilized with the MDS System are:
Velocity Reporting: Velocity reporting aligns inventory with customer demand, ensuring that inventory mix is always in line with actual demand. Velocity reporting highlights slow-moving inventory to enable distributors to avoid discount wholesaling and liquidation.
With this data, you can see how well each SKU does in any given timeframe. If you discover 100 SKUs with no sales, it’s a good reason to cut your losses and get rid of those items. By identifying slow-moving inventory, velocity analytics can also play a role in reducing holding costs, improving the your bottom line by minimizing the storage costs of sluggish SKUs. See our Inventory Dog Post..
Cycle Counting: When creating a better inventory strategy, a great second step is to make sure your inventory is as accurate as possible. Introducing cycle counting based on ABC (Velocity) logic is a much more accurate way to manage inventory based on a pre-defined count calendar. For example, you can count your A inventory (fastest moving items) monthly, B inventory quarterly and C inventory (the slowest moving inventory) once or twice a year. See our Blog Post - How to eat an elephant...
The secret to successful inventory management is to use all of the data and insights available to plan and forecast accurately. Distributors who work with their ERP systems and providers to develop a strong foundation for effective inventory management will be in a good position to move inventory quickly throughout the year, while continuing to cater to customer needs.
Does your system give you the tools you need?
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