2015 Inventory Planning Wish List
Today, I'm heeding my own advice about conducting an annual process post-mortem, on a personal level. I've been reflecting on the businesses I've worked with this past year here at Direct Tech, and thinking about how my experiences with them will affect my own planning for the year ahead.
In the course of that analysis, I've identified several issues that crop up repeatedly industrywide. I'd like to share them with you. So without further ado, here are the top five inventory planning process improvements I'd recommend that all companies address in 2015:
1. Embrace change. It seems odd that this would be at the top of the list. After all, the retail omnichannel transition has been with us for a while now. Still, many companies remain reluctant to adjust their merchandise and inventory planning processes to meet the new reality, and therefore are losing ground to those companies that are willingly facing the challenges. You know the old saying, adapt or die.
2. Don't just ask, demand a seat at the management table. As an inventory planner, you're responsible for your company's largest asset. You have unique insights as to which products are truly successful and, beyond that, the ability to align critical inventory ownership with customer demand. This is no time to be passive. Your input can help drive increased sales and profits for your business — but only if you're part of the decision-making process.
3. Embrace the power of incremental gains. It's a proven fact: even small gains in inventory metrics — e.g., higher order fulfillment, fewer overstocks, better inventory turnover — significantly increase sales and profits. Don't swing for the fences; instead, focus on hitting for average. Do the little things well and continually seek to improve your game (especially the time-tested 80/20 principle).
4. Build good plans and react urgently. Of course there's no such thing as a perfect merchandise plan, demand plan or inventory purchase. Success invariably comes from creating a strong plan and supporting it by having the processes in place to react quickly to the inevitable changes in your inventory requirements.
5. Leverage the power of your network. While inventory planning will always rely on timeless fundamentals, today's omnichannel retailing demands a steady influx of new ideas. No one has all the answers; however, sharing insights with others can greatly improve your knowledge and processes. You'll find "networking" well worth the effort. So don't hesitate to talk shop with your peers inside and outside the company, and to tap industry resources by participating in LinkedIn Groups or attending conferences such as Shop.org and NEMOA events.
Obviously, nothing is ever as easy as it sounds. However, if you successfully tackle these five objectives, I think you'll be quite pleased with the progress your inventory planning has made by the time your next post-mortem rolls around.
Joe is Vice President of Product Solutions at Software Paradigms International (SPI), an award-winning provider of technology solutions, including merchandise planning applications, mobile applications, eCommerce development and hosting and integration services, to retailers for more than 20 years.
Joe is a 34-year veteran of the retail industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End, LifeSketch.com, Nordstrom.com and Duluth Trading Company. At SPI, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.