Inventory Management: An Integrated, Disciplined Process ...
Develop a partnership to ensure that marketing is informed of changes that potentially impact marketing forecasts, such as changes in average price offered (which will impact average order value). In a given season, a solid working relationship between inventory and marketing reinforces demand forecasts for improved and confident re-buy strategies.
2. Merchandising: When harmoniously working together, these two areas are a winning combination. But many catalogers create an adversarial relationship between the two departments. While I’m a strong advocate of having separate reporting structures for merchandising and inventory for control reasons, many catalogers physically separate these two.
To make matters worse, catalogers often set P&L responsibilities that are by nature conflicting. Best industry practices recommend that inventory and merchandising jointly are responsible for company fill rates and overstock levels, reinforcing a team approach.
This team approach can further be reinforced in developing vendors relationships. Too often vendors provide differing lead times to buyers and inventory control personnel. When these areas work together, vendors realize that both departments speak with one voice. That improves information flow and accuracy with receipt planning and fill rates.
3. Finance: Inventory management is the “merchandise banker” and should control merchandise spending. Communication with finance ensures that spending controls are in place and inventory levels are properly balanced. Communication with finance, including accounts payable, improves outside vendor relations as inventory management is made aware of potential cash flow constraints on the season.
4. Creative: Having inventory management involved in catalog preproduction improves the accuracy of information and builds yet another partnership between departments.
Inventory management alerts creative and merchandising of copy errors in descriptions or pricing, and likely fill rate shortfalls based on creative reviews.
I established a catalog “walk-through” before final copy corrections were due, in which representatives from most departments would review the catalog tacked to a wall in pagination sequence.