Collaborating with vendors is something every retailer does every day.You set up promotional plans, create POP materials, make co-op marketing agreements, devise better training programs and a thousand other things that set both vendor and retailer up for success. Cultivating relationships are key to making things go more smoothly. But most retailers have difficulty supplying vendors with one piece of communication, and it can become a big pain point.
Demand Forecast, Demand Forecast, Demand Forecast
It’s impossible to know how much to buy without forecasting expected sales. Retailers’ inventory analysts spend hours each week on forecasts to guide their orders. Other members of the team, meanwhile, are forecasting for promotions, new items, open to buy plans or assortment changes. Forecasting is going on all day, every day at every retailer. But for all the time spent forecasting, that information typically isn’t shared with vendors as often as it should.
Why Vendors Need Demand Forecasts
Vendors forecast their business internally for ordering materials and scheduling assembly-line or overseas-factory time. No matter how good their forecast, they don’t have a lot of visibility to retailers’ plans unless retailers provide them. Without this vital input, vendors use their best judgment. Unfortunately, they get blindsided by sudden demand increases and are unable to react quickly. If they had more frequent and more accurate forecasting from retailers, they could ship more reliably, making both retailer and vendor more money.Both parties understand this need, but it’s not that simple.
Why Retailers Don’t Provide Demand Forecasts More Often
Providing forecasts to vendors is typically manual and time-consuming. Many demand forecasting systems make it hard to share forecasting information outside of the system; there are simply no reporting capabilities. Sometimes forecasts are housed on spreadsheets that contain sensitive information. Those spreadsheets need to be changed before they can ever be sent to a vendor. It’s also not unheard of to have three forecasts floating around from three sources.How do you choose which one to send, or do you need to combine them into a new forecast? At the end of the day, sharing forecasts with a vendor usually comes down to a person having the time to do it and remembering that it needs to be done.
A Vendor Collaboration Success Story
In my retail career, I have enjoyed one and only one time where these gaps closed, allowing me to provide forecasts reliably, thanks to iKIS™ from Data Profits, Inc.Not only could I put all my forecasts into one system (true demand forecasts with promotional forecasts included), but vendors could have direct access to their item demand and order forecasts online. With iKIS, a vendor and retailer can look at the same screen and speak the same language. Trusted vendors can be granted access to edit their own forecasts or even move to a Vendor Managed Inventory (VMI) model. Ad-hoc reporting can be run directly out of the system when needed. Direct system access means a vendor doesn’t have to wait on the retailer,freeing up more time for planning and strategy. Vendors can even schedule email and text alerts so when something changes, they will know right away. Over time, iKIS helps limit late and short orders, and relationships with vendors can become more strategic and less reactionary.A win for both sides.
As a web-based SaaS demand forecasting and supply chain solution, iKIS™ provides fast install times and a quick ROI at a fraction of the cost of other systems.If the lack of reliable forecasting is putting a strain on your vendor relationships or is eating up too many man hours, contact us today to see how iKIS™ can help you take vendor collaboration to the next level.