How Inventory Planning Supports Marketing Decisions
Thus the in-season reforecasting performed by inventory planners is crucial to profitability. It’s where knowledge, systems and processes can have their greatest impact. In short, these timely, well-informed plan adjustments will help any business accomplish the following:
- make faster, smarter repurchase decisions when reordering inventory to fulfill projected shortages;
- cancel or delay purchase orders for unneeded inventory;
- direct consumers to the highest quality inventory to optimize sales, reduce wasteful marketing expenses and clear out excess inventory; and
- initiate markdowns on overstocks to maximize gross margin and dispose of unwanted inventory (quick response yields the best possible gross margin while minimizing inventory carrying costs).
The idea is to take the right action at the right time and to continually optimize business performance using the best and most recent information available. The speed and quality of inventory planners’ decisions can heavily impact both top-line sales growth and bottom-line profits, even for a smaller retail business. The relatively low cost of investing in inventory planning staff, systems and processes will deliver immediate, significant and enduring sales and profit gains for your business.
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.