Forecasting and Replenishment: a Time-Bomb Awaits.
Customer preferences have been changing; customers want personalization, on-demand product information like price deals, and exceptional customer service like 2 day delivery. For companies to be successful in this marketplace, they must adapt the way they do business to accommodate such changes. One aspect of a business, which directly relates to accommodating such change is forecasting and inventory replenishment. The real story is how market expectations have moved far beyond legacy inventory replenishment systems.
Your Inventory Replenishment System, the Painful Truth
Forecasting and Inventory Replenishment systems designed 7 to 10 years ago never considered a world where the customer had instant information to buying with delivery options that were both free and completed often in two days. Legacy forecasting and inventory replenishment systems are not designed or suited for the marketplace today. The sad truth is many retailers have accepted their sub-par systems as best of breed, wasting money on upgrades that cannot answer the inventory replenishment parameters of today’s business with correct amounts of available inventory, a big Customer Expectation today.
Mistakes others made before You
Examples of business failures, even catastrophic ones, related to inventory replenishment among other factors include companies during the dot.com bubble burst in the early 2000s. An example is e-grocer Webvan, which failed in part because it did not have sound demand forecasting, and thus provided too much inventory. It is not a new idea, each Christmas we learn of retailers who couldn’t deliver goods they sold online. In 2011 click to read how Best Buy can’t fill customer orders in time for Christmas and in 2012 read how Toys R Us problems during Black Friday week, last Christmas season – out of stocks.
Businesses have to be mindful of such even with respect to addressing today’s customer preferences, which includes inventory readily being available, with fast delivery when needed. These and other new expectations have become too complex in legacy supply chains, leading to a serious strain on inventory available.
A Strain on Inventory is a Drag on Profits
To address such strains on inventory available, industry experts recognize that forecasting and replenishment helps to ensure that retailers have the right amount of product at the right location at the right time, and in fact end to end across the supply chain. The objective is to sustain a high level of service so that the customer has that valuable experience but, at the same time, not overspend on inventory just to satisfy that requirement. The replenishment engine ‘SHOULD’ account for everything related to moving a product in the most efficient manner from point to point. Some supply chain points often omitted include, yet are not limited to: vender restrictions, purchasing load requirements, required lead times, transportation costs, and so on.
Forecasting and Replenishment New Strategy
This is why forecasting and replenishment have a considerable impact on business. It is not only about having the right data, but also having the right data in real-time. This is essential for the future of retail. Review your legacy system, modern systems should be able to address everything we listed here and at a cost substantially lower than existing legacy systems and install in 4-8 weeks. There is no need to accept sub-par forecasting and replenishment solutions.
We are here to help, take a few minutes and fill out our Contact Us card, let’s talk. We can show you new tools and how they differ from legacy forecasting and replenishment software to enable you to Profit in Your Data and ‘Tighten the Links in Your Chain™.’
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