What to avoid and what to look after in regards to Inventory Management System on Black Friday
Ever growing number of online sales whether being brick and mortar (B&M) with small online shop or pure play stores, they all have created an urge for top-notch inventory management system and logistic support. Big quantity of products and produced demand entail extra care and dedication so that the right product is being served at the right place and time. Dealing with logistic ecosystem is more than simple shipment; nevertheless the process requires overall functionality (A to Z) whereby a team within a company needs to be appointed to this position.
Nowadays, customers have enormous rights when engaged into online shopping, giving them all the comfort needed. Claimed returns for various reasons and worldwide shipment, plus packaging are just a few that need to be taken care of. Entire navigation of supplementary elements of the product itself could drive company’s focus away from innovation. This is especially the case with SME’s where they have experienced deficiency of employees and so burden of logistic problems had trapped a company as a whole.
When observing retailers, they have two options in their hand, either to do the heavy lifting by themselves or to request a 3rd party that will overtake the whole process independently. In both cases there are couple of options to choose from:
Minimal viable stock level – This method is highly used and incentivized by many professionals in the industry since it is based on verified data. Those estimated are extracted from shopping history and an average has been calculated. Nonetheless, when it comes to sudden rise in demand and unexpected boost in sales, company is unprepared and they might be in trouble of fulfilling promised deadlines .
JIT (just-in-time inventory) – Named approach is great for companies that want minimal risk and therefore their money is not tied to unsold inventory. Yet, a possible downfall of this method could be sudden spike of sales just as theme of this blog post. Upcoming Black Friday, Cyber Monday, and so on could all be harm to this system due to inability to deliver.
FIFO (first in first out) – Quite rational reasoning is set up for this specific option. When a product enters a warehouse is the first one to exit and to be sent to the customer. This is noteworthy for perishable goods and their expire date.
FILO (first in last out) – When outlining this concrete option, it is highly redundant and less frequently used especially when food is the good stored. This system is risky and could not be applied for pharmacy, food or any other product that has its expiry date, and even if it is not, companies still do not use it often.
Forecasting demand – If having developed special set of skills or if a person is extremely analytical and intuitive, this approach will function smoothly. However, when human factor is involved there is still a fair space where all could go wrong. But even though the risk exists, it is quite good system because market and customer buying behavior is recorded at all times which could create a fair pattern of trends.
Inventory auditing – When all is centralized with computer system chances that something has been inputted wrong are minimal and therefore confusion cannot happen because it is not recorded with paper & pen. But, even though technology is indisputable nowadays and best used technique, some old school rules are still practiced. Namely, if a company is not too confident with technology they own manual check of inventory is more often. But, even when all is perfectly sound with technology in order to minimalize overall risk employees still do the checkup yet on more scarcer bases.
When all has been explained, what will be the best approach used and who will predict this years sales the best? Statistical data demonstrates an increase in shopping on Black Friday from 2014-2015 up to 14.3 percent. Jump in e-shopping in contrary to physical shopping was expected high for this year too, but whether the estimation will exceed the expected is questionable. Consequently, when speaking of big volumes of people shopping in a given time span, promotion of a company needs to be prepared beforehand but also act on point. In these situations inexperienced people that fall behind could cost a company fortune for lost opportunity when they could’ve had a professionals. Situations like these entail professionals that have had considerable experience prior to solving you own problem. What is more, when the immediate chaos disappears more problems only arise and that is to replenish the sold stock. System of operations and people need to meet requirements because if one of employees misplaces a section it is matter of time he/she will realize that it has no time to cope with new upcoming problems.