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Monthly Archives

November 2015

black-friday-how-to-manage-inventory-and-enjoy-your-holiday-at-the-same-timeThanksgiving should be a holiday for all of us to take a much needed breather and spend some quality time with our friends and family. But if you work in retail, what should be a holiday usually turns into early mornings, late nights, or no vacation at all. In order for customers to shop on Black Friday, it takes others to leave their holiday early to stock shelves, man registers, or be on call for those on the front lines. Even the corporate office doesn’t get a break; if one store is open, there is someone back at the office too. With more stores open on Thanksgiving Day, more and more of us have to cut our holiday short.
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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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does-the-obvious-ever-escape-you-during-the-holidayI am amazed at where my education has failed me at this point in life. Allow me to clarify, when I was a child I looked at older people and thought, I can’t wait to be that smart one day. Now after years of school, college, grad school and a wealth of experiences I am amazed at the things I just don’t know.  Don’t misunderstand, I’m not saying I expected knowledge to solve world hunger.  I mean basic stuff like why things on my desk on Monday are still there on Friday or why have I procrastinated with my holiday shopping…again. You see what I mean, simple obvious stuff that I should just know how to solve at this point.

When I managed the inventory for the retail chain Upton’s I was puzzled at why some inventories seemed to explode on the shelf, regardless of the processes that were in place to avoid the overstock. This was not just slow or intermittent demand; at times this was high volume product that a buyer believed we needed a 3 month supply on a 10 day lead time – obvious right? I know….

As the holiday starts to wind down, and we review our inventories and make plans for the spring, maybe it’s time to start thinking about what we can do different in 2016.

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One of the questions that we get quite frequently is what is the difference between Demand Forecasting and Sales Forecasting? It seems that often the terms are used interchangeably. But once you understand the benefits between them, you’ll realize how important the distinction is. Then the next logical question is how do you know which method your system uses?

In this letter, we review the difference between Demand Forecasting and Sales Forecasting for inventory replenishment. While at first glance they appear to be similar, their differences can mean significant disparity in forecast accuracy which dramatically impacts overall profitability resulting from over stock and out-of-stock scenarios. How do they differ? The difference, you’ll see below, is not necessarily in the mathematical algorithms, but rather in the actual data points used to calculate the forecast.

Bottom line? An inventory replenishment system that is based on a demand forecast (demand driven) can reduce the risk of lost sales while improving service. This in turn delivers higher sales by connecting inventory levels with demand forecast.

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Omni-Channel-Fulfillment-Cure-for-the-Common-Cold-or-Hiding-the-Truth“Omni-channel” is a big buzz word in retail right now. Everyone wants to be “Omni-Channel”. The reasoning for an omni-channel approach is sound. For marketing and merchandising, customers see the same messaging, items, and pricing across all platforms. For inventory and order fulfillment, customers have access to all of your inventory, from stores to DCs.

Omni-Channel is No Cure, Is it Even Symptom Relief?

There are so many advantages to Omni-Channel retailing. But while omni-channel order fulfillment can help you take care of your customers and clear some inventory problems, it can also hide flaws in your demand forecasting system and in your supply chain. Much like over-the-counter cold medicine, omni-channel fulfillment can relieve the symptoms of an ailing replenishment system temporarily, but it can’t cure the underlying problem. Like the common cold, there are many with the ‘magical’ cure but the question you should ask is how did they make the cure if they wrote their base code more than 5 years ago…98% of software is in that category…and all most software does is relieve the symptoms, not a real cure.
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