Make friends with season’s Wholesalers
Christmas is undoubtedly the most important, and puts enormous pressure on supply chain managers to ensure products are available and that everything moves smoothly through the season. After all, it is the weeks just before Christmas that, in many retail sectors, determine a business’s financial health; John Lewis, for instance, reportedly generates 80% of its annual profits during Christmas period.
Now what happens to the businesses that either have not forecasted properly or on the other end have put too much in excess inventory, overtly?
Long-Term Forecasting and Initial Purchases Vs. Near Term
In many specialty retail sectors – clothing and electronics for instance – goods are often sourced from the Far East with long lead times. This means that they need to be ordered way before there’s any actual Christmas sales data. But as Christmas causes such an exceptional peak in demand, preorders made well in advance enable suppliers to plan their production. But sometimes there might be an opportunity to place some extra orders closer to or during the season.
Stock Up
The challenges that retailers face during Christmas naturally vary according on the sector and from company to company. For many specialty retailers, having to cope with long lead times, Christmas challenges centre around estimating the season’s demand both well in advance and accurately; not an easy task. The “fittest” retailers blend art and science into forecasting and buying. Half the battle is in the planning, so it is better to consider Xmas factors sooner rather than later as if you manage and monitor performance diligently, you can avoid the effects of subsequent running out of stock the middle of buyers storming in. Now that requires setting an emergency merchandising battle plan.
Leave space for near term buys
It’s a truism that the “fittest” retailers are those who not only take command of a good stock management system, but also excel in near term buying also. In line with this attitude, Cetrix has always set a last call inventory clearance on his major tablet products in mid-November.
Now in the midst of forecasting why not take the opportunity on near season inventory clearances by major distributors? But who has agile maneuverability to respond? Forecasting and buying inventory requires a blend of analytics, intuition, strong boundaries and vision. Unfit businesses often buy with their opinion, taste and relationship skills as their only negotiation weapons. With an average of 15% of customer sales unfulfilled due to items being “out of stock”, the right forecast and stock can unlock store profits and increase sales.
Sync with your supply chain and shipment
It's also important to keep your supply chain in the loop and communicate about your marketing and promotion plans. The last thing you want is to be out of stock at the very time you need it most.
Think about your shipping strategy. Make sure your inventory is staged where it needs to be, which is especially important for retailers who are using stores as virtual distribution centers. Keep UPS informed as well. When and where your package volume increases.
More retailers are taking advantage of their locations and inventory to ship from stores. We at Cetrix, work with retailers to optimize store operations with processes, technology and training that make the shipping process as simple and seamless as possible." You can find out more about UPS solutions by talking to an account rep.
Final advice
Christmas is undoubtedly the most important challenge, and puts enormous pressure on every retailer. But try to reduce the load with short term stock-up, making friends with wholesalers and a balanced strategy.
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