The holidays can be a stressful time, especially when it comes to inventory management. By considering these five keys, you can unlock a stress-free holiday season.
Predictive Analytics
Problem:
Inventory forecast numbers are inaccurate and firms are either left with a shortage amidst the holiday rush or excess inventory in the new year.
Solution:
Predictive analysis can more accurately forecast demand by taking into account all affecting factors. This type of software helps you optimize allocation and replenishment to balance inventory across locations and meet customer demand. Whether you have one product and two locations, or 1.000 products and 100 locations, there is a solution that can help you.
These systems account for factors such as product color or size, the distance between stores, product price, cost to transfer, or inventory amount. As a result, you can use this to more accurately meet demand. Predictive analytics give organizations the ability to be proactive instead of reactive. For this reason, you can meet demand during the holiday rush.
Inventory Accuracy
Problem:
Inventory levels or historical data is tracked inaccurately and incorrect data being used to make decisions.
Solution:
Before you can implement automation in your demand planning, you need to make sure you have accurate data. Accurate information is the foundation of agile decision making and creates confidence in demand planning. Many companies make decisions off of skewed numbers and end up with skewed results. Let’s say you plan to sell 150 baby dolls this December. You predict this based on the past three years of holiday sales data. What you don’t realize is that your inventory count has been off by 20 parts for the last two months. Those 20 parts were shipped out as part of a sample campaign for your major customers but weren’t properly recorded.
Your forecast may have been correct with the data given, but since it was inaccurate you are now short product a week before Christmas. Implementing processes to ensure data accuracy is vital for any time of the year, but especially around the holidays. Putting these processes in place well in advance can help you find success during those busy winter months.
Automate your Inventory
Problem:
During the holidays you have more product to deal with in a shorter amount of time. This leaves more room for error in decision making.
Solution:
Implementing automated software to track and replenish your inventory can save you time and money around the holidays. Setting this up before the holiday season will ensure everything’s running smooth before the big rush. By using automated software in tandem with barcode tracking, you can set up a real-time system of information.
As soon as you sell or receive new product you can scan the item and the inventory system will automatically update to reflect those changes. The inventory management software tracks inventory levels and send alerts when you are running low. Some systems have even advanced so that orders can automatically be placed when inventory drops below a specified level. Automating inventory management lets you know exactly when you need to restock and ensures your orders always make it home for the holidays.
Contingency Planning
Problem:
After the holiday shopping is done, many organizations frantically decide what to do with excess inventory and end up losing profit on items that could have been sold at full price in the new year.
Solution:
Having a contingency plan in place for after the holidays can help you have a stress-free December and profitable January. We all know the only thing that is certain about demand forecasting is uncertainty, and you can use that knowledge to your advantage. Put a plan in place for what will happen if your forecast is off and you end up with excess inventory. This contingency plan will vary from business to business and industry to industry. You need to take into account expiry dates, social trends, demand, and more. You might be better off to sell it at a discount in December, or you could boost profit in January by holding out.
Return Processing
Problem:
After the holidays are over, many gift recipients look to return or exchange products. Quite often they are missing the receipt or lack knowledge of the original purchase.
Solution:
Implementing a clear process is the first step in hassle free returns. Around the holiday’s many companies take on temporary staff to help with day-to-day operations. The one problem with this is that they are not as familiar with the internal processes. By clearly outlining the return policy internally and externally you can avoid potential confusion.
In addition to this, implementing a return barcode system can make your return processes more simple around the holidays. Some companies add “required for return” barcode labels to gift items or additional information to existing barcode labels. Employees can simply scan the barcode to get all the information to make the return or exchange.
The holidays can be a stressful time, especially when it comes to managing inventory. By using these five keys you can unlock a stress-free Christmas and a happy New Year.
