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Tag Archives: Service Level

Do-You-Make-These-Mistakes-In-Your-Service-GoalsDecember is a time when many retailers are trying to manage orders to meet end of year inventory goals. How do you decide which items to buy and which items to cut? If you are trying to maintain the same instock level on every item, you are going to end up buying too much of some items and reducing orders on best sellers in order to pay for it. You can avoid this pitfall by managing service levels rather than focusing on instocks.
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Is-your-Demand-Forecasting-Ready-for-the-Year-of-the-Monkey-3-Things-to-CheckChinese New Year: Its Coming, Is Your Supply Chain Ready?

Chinese New Year starts on February 8, 2016. Most retailers are familiar with Chinese New Year because every year their Chinese suppliers and factories shut down for a few weeks. Chinese New Year is a huge celebration for China and many surrounding countries. Workers head home for a much deserved vacation that can last 4 weeks or more, leaving quiet offices and empty factories. That means nothing is shipping and that can result in empty shelves or managing the cost of overstocks- if your Inventory Replenishment software bought the right products.
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Slow and Intermittent Product Demand Forecasting Facts & Myths

Slow and Intermittent products make up 35-40% of most retailer assortments.  These products often are critical to the assortment because a top 20% product is often paired with a selection from an assortment of slow demand product choices.  This large group of products in your assortment can ruin your turn goals and your GMROI when managed incorrectly.  There are two key pieces that must work together for a retailer to win with slow movers: the demand forecast and how the supply chain software uses the demand forecast to manage the inventory. The results of poor buying are low turns and loss of capital for other product.

Slow and Intermittent Product Demand Forecasting Myths

“How do you forecast slow and intermittent demand products?” The same question was posed to me in three different meetings at NRF this year.  Many software companies differentiate their demand forecast capability from their competition by highlighting their skill in forecasting slow and intermittent product demand; at the same time, they strike fear into the hearts of retailers by highlighting retail losses delivered due to poor demand forecasting of slow moving products.  The key to this discussion is to not get trapped into a no win conclusion. More than a great Demand Forecast is needed to attain winning results with these product groups. Like the story of the ‘Tortoise and the Hare’, Slow demand products are part of any assortment and can be big winners.

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drought-strategies-to-successLeverage Your Lost Sales Data to Grow Profits

The key to successful Demand Driven retail is leveraging the right data in the right places. Lost Sales data has a lot of leverage that, when ignored, can be your demise; however, those that successfully measure and leverage Lost Sales data will see sales and profit gains. Our Lost Sales blog today outlines how lost sales data can be used to improve inventory optimization and highlights how all the pieces are interconnected. We also dive into the differences between lost opportunity and lost sales, the differences and impacts between the two, and close with some sobering statistics from Lost Sales data collected from the industry.

Our first blog on Lost Sales highlighted the staggering impact of Lost Sales in most businesses today. We outlined some of the methods used to calculate lost sales, and why these methods do not deliver value. Our second Lost Sales blog reviewed how lost sales can add value to demand forecasting and improve the accuracy and value for the service attained calculation.
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Truth, Lies, and Strategies for Lost Sales - Part 2

Why Lost Sales are Ignored

Our last blog highlighted the staggering impact of Lost Sales in most businesses. We outlined some of the methods used to calculate lost sales, and why these methods do not deliver value. We touched on in-stock and Service Attained as two measures that in the past were acceptable inventory ROI measures but, in the market place today, these methods are dated and focus retail in the wrong direction.

With the advancement of inexpensive hardware, we can calculate a very accurate demand forecast across any block of products in our assortment and measure the business at any individual (or group of) product / locations. We can easily track available inventory for any product/location at a moment’s notice. This makes calculating lost sales a simple calculation: sum demand for the days where available inventory <=0. Today, we will review how lost sales impact demand forecasting, service attained, and inventory optimization.
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