Getting your forecasting right is not a black art
The problem with running a retail business is that you are always trying to maximise sales whilst being careful not to overstretch yourself in cash flow and inventory. For many years writers have argued, quite rightly, that a company can flounder because it has too much inventory.
However, it is also true that companies can miss huge opportunities for additional sales by missing the return to affluence after a recession. Sales are never easy to come by and to miss sales opportunities because you are running a “tight ship” can be just as costly, especially if your competitors are getting it right.
Whether you need to run a tight ship because the recession is coming or maximise your sales on the wane of a recession it is difficult to achieve the best results if you are not using state of the art supply chain optimisation technology. Understand the trends in your business and getting your forecasting right is not a black art, it is science and one that few humans can manage for thousands of items across hundreds of stores without the help of technology. Add to that the seasonality and promotional activity within a retail business which can throw them off the right track and you have an almost impossible task. Senior management are always the first to jump on the supply chain if they are not performing, delivering great service level at a low cost, they must therefore realise that outdated early inventory management and supply chain optimisation solutions are not capable of delivering the results needed in todays incredibly competitive retail environment.
Even some of the very largest retailers have been caught out by the fluctuations in demand caused by the recession and then recovery, and we are only just starting that recovery. Today all retailers can benefit from the state of the art technology to optimise the supply chain, using SaaS the costs are not prohibitive and reflect the size and success of your business.
Make sure you are a success and not missing opportunities to survive and even grow market share. These tough times are also great opportunities to get ahead of the pack and really become a world class retailer. Customers notice poor service levels and out of stocks, they have ultimate choice and will vote with their feet. Be one of the leaders and use your supply chain to win, not to cost you money.
Stay on top of the latest trends in supply chain
Subscribe to receive monthly blog updates.
Other blog posts
- Expanding Into New Territories – What Should a Retailer’s Supply Chain Look Like?
- Deep Space – Retail’s Next Frontier
- Technology’s Role in Managing the Evolution of the Customer-Centric Supply Chain
- Supply Chain Buzzwords 2017 – See The Highlights At NRF
- Executing on time, all the time: apparel executive’s guide to competitive advantage