Getting your forecasting right is not a black art
The problem with running a retail business is that you are always trying to maximize 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 maximize 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 optimization 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 is 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chain if they are not performing, delivering great service level at a low cost, they must, therefore, realize that outdated early inventory management and supply chain optimization solutions are not capable of delivering the results needed in today’s incredibly competitive retail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 optimize 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 retail planning
Subscribe to receive a monthly digest of our most valuable resources like blog posts, whitepapers and guides.
Other blog posts
- It’s in Grocers’ Best Interest to Address Food Waste Now
- Are You Wasting Time and Money on a Poorly Integrated Supply Chain?
- Key Themes in Grocery Retail – A recap of RELEX’s second Grocery Forum
- The Importance of Accurate Forecasts in Omnichannel Grocery Retail
- Study Highlights Opportunities for Grocers to Reduce Food Spoilage