If you’re a business owner, it’s important to know if you have inventory planning issues. If you don’t take early steps to address these, it’s likely to get worse.
Here are 4 red flags that your business might have poor inventory planning:
🚩Sign #1: Your sales are good, but you don’t have cash flow.
Your sales seem to be growing, but you aren’t creating surplus cash for the business, or maybe you aren’t able to pay your bills, or yourself.
🚩Sign #2: Inventory surpluses or shortages
You have a stock shortage or surplus – these two events are the most common inventory management pitfalls.
🚩Sign #3: Inventory costs are rising while customer satisfaction levels are not
Good inventory management means that there is a direct correlation between inventory costs going up and customer satisfaction going up.
🚩Sign #4: You are utilizing the wrong metrics to measure your inventory management performance.
You are using a static “Days of Inventory” metric to measure your inventory management performance. You are not measuring your inventory management performance based on your service levels and customer satisfaction.
🚩Sign #5: Your inventory planning is not integrated with your supply and demand planning
In order to optimize your inventory, you need to calibrate inventory levels with demand and supply conditions – so that you can improve your inventory turns and ensure that you always have the right stock of the right goods in the right places at the right times.
If these red flags sound familiar to you, the solution is to hire not just any inventory planner but a SMART one.
Not sure where to begin your search?
Retail Smart Guys offers an inventory planning service for retailers, one that can help you boost your profits and lower your costs.
We analyze your inventory and, if necessary, reclassify it to what you need to buy property.
Then we provide a detailed monthly open-to-buy plan for each class (by location for multi-store retailers).
By planning this way, we can help you to reduce markdowns and enhance your profitability.
We make sure you have the proper inventory levels in all classes, and at all locations.