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Monthly Archives

October 2013

5 Scary Changes to Your Inventory Replenishment ---Which Do You Make?

You are scared of change, so are most people. It is a basic human emotion that we all fear change. When faced with the need for change, reality sets in and you’re reminded that the world changes constantly. A business that doesn’t change is doomed to fail. This sounds harsh but history teaches us that life is all about change. You either change, adapt (like a 1/2 change), or die. The irony in that statement is that often companies will change people but fail to change processes or systems, expecting things to improve. How long did your foot stay stuck in the mud? Until you pulled it out, you didn’t go get a different person’s leg. The same with supply chains, until business and people are willing to make changes, expect the same results.

 

 

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The Truth about Inventory Optimization: Show Me the Money

You might be asking why do I need Inventory Optimization? – To increase your profits and cut your costs. A truly optimized inventory results in lower inventory and lower lead times by creating a balancing act of acquisitions cost, carrying cost, vendor minimums, price breaks, gross margin, sales dollars and service goals. Retailers need to review, measure and act on their inventory every day.

Inventory Optimization doesn’t mean Out-of-Stock or Over-Stock

Just last week, a retailer wanted to know how his optimized inventory resulted in overstock and out-of-stock at the same time. We hear this question all the time and the answer is simple. This retailer doesn’t have a true demand driven optimized inventory because they don’t own an inventory optimization solution or the solution they are using doesn’t really optimizing inventory, or they don’t use the software they own preferring to rely on holding their thumb up to feel which way the wind is blowing among other old-school tricks.
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Great Sales Forecasting Equals Out of StockSales Forecasting is a measure of the market response; it is not a measure of market demand. The problem with sales forecasting is that simple; the most accurate sales forecast is only a measure of market response to what you had available. This is not accurate when considering future market demand. Issues with constrained supply, service levels, price and promotion are not analyzed correctly in Sales Forecasting. This is why sales forecasting is responsible for out of stocks and overstocks in many companies.
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Two Expensive Inventory Issues: Which Do You Fix First?Do you know the root causes of the four common inventory issues: out of stock, overstock, bumpy cash flow, and lost sales? Your goal is to have the right products in the right quantity at the right locations just in time to sell with terms from your supplier that allow you to use your money again before you pay the supplier. No one would argue the success of this strategy, so where is all the grief? In truth, there are four root causes to the most common inventory issues. Unfortunately, many companies fail to identify and act on these root causes, resulting in lost profits in the form of lost sales and higher operating costs.

  • Out of Stocks – Supply Chain Issues
  • Overstocks – Operation Problems
  • Bumpy Cash Flow – Planning & Finance
  • Lost Sales – Customer Service Issues

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Data Profits Chosen by Gartner Research for Inclusion in 2013 Forecasting and Replenishment Guide for Retailers

Leading mid-market SaaS Supply Chain & Planning solution highlighted by Gartner

Atlanta, September 17, 2013 – Data Profits Inc. has been selected by Gartner Research to be included in their latest research report titled “The Gartner Retail Forecasting and Replenishment Vendor Guide, 2013,” published in August 2013. In this annual guide, Mike Griswold, Research VP at Gartner, analyzes the available SCM solutions to identify the key demand driven forecasting and inventory replenishment functionality that leads to higher supply chain performance and profitability. This guide is designed to be the starting point for retailers to select an appropriate solution provider based on forecasting and replenishment initiatives.
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