The China (Sourcing) Syndrome
- the ability to buy the right inventory and have it on hand when the customer wants it, increasing top-line sales;
- reduced overstocks and the markdowns that go with them (for a typical $50M business, a 2 percent reduction in overstocks can increase annual profit by $200,000);
- improved inventory turnover and cash flow as buyers can schedule as needed rather than delivering early “just in case,” lowering carrying costs;
- enhanced staff efficiency, leading to significant labor savings; and
- reduced back orders (the cost to process and ship a back order can run as high as $10 to $20 per transaction; fewer back orders means lower operating expenses).
There's no single solution that will allow domestic retailers to fully recover the surging supply costs resulting from the rapidly evolving Chinese economy. It makes good business sense, however, to include accurate inventory forecasting as a key component of your solution strategy.
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.