Making sure you’re meeting customer demand – being smart about inventory management

At the very least, good inventory management should ensure that customers can buy what they need from you when they need it. Every time a customer can’t buy something because it’s out of stock, they will probably go to a competitor instead – and many times, finding a competitor is only a quick Google search away. And you then risk losing not just the sale, but also potentially a repeat customer you didn’t even know you had. 

On the other hand, holding a lot of stock can be very expensive, especially when it takes a long time to sell. Balancing the risk of lost customers and revenue with the costs associated with over-stocking can be a tricky business. Using data strategically can help you with forecasting and managing inventory on an ongoing basis. By analysing integrated data from your supply chain and business operations, you can gain a greater insight into both your customers and your supply chain - ensuring your stock levels are where they should be.

The benefits of having greater insight into your data

To ensure you have stock levels which are meeting customer demand, you need to think about your annual sales cycle in advance. Ideally, you need to have a good idea of what stock levels you need before customers are actually buying the product.

By analysing your historical data and sales transactions, you can improve the accuracy of your forecasts of demand for a particular season. This means you can see what people bought at a certain time last year, analyse how the current market may affect sales, then predict what people might buy in the future.

You can also accurately track inventory throughout the entire supply chain, allowing you to compare your current stock position with your short and long-term trends. It also gives you the ability to better monitor sales by product, location and customer so you can start to get a global view of the many factors that can influence sales.

Using data to improve inventory management

Reporting on metrics related to your supply chain, sales, production and other operations allows you to make better, fact-based business decisions.

The first question to ask is where you need to get this data from – is it in your head, on a ledger, with your accountant, or in the cloud? The reality is that inventory data may be stored in more than one system.

Many of our customers have brick-and-mortar stores and an online store. Both the physical and virtual stores are run by cloud applications that maintain their own inventory, but very rarely are changes synced between the two systems. For effective inventory management, however, you really need just one source of truth.

By collecting your data in a central point, such as SyncHub, you can get a single view of your data – often in real-time. By analysing this information in the right way, you can gain huge insights into your inventory and sales performance, helping you to improve the accuracy of your forecasts. If you have a good handle on future demand, you will have a better idea of how much buffer stock you need.

By integrating your inventory data with your sales information, you can also identify potential situations where stock may need to be increased in order to prevent losing sales. You can also see if planned orders are too high relative to current sales trends and reduce them as necessary. It also reduces the need for buffer stock by identifying bottlenecks in your delivery system and reducing lead times for distribution from your warehouse to the shop floor.

Data can also help you to identify which products should be discontinued or discounted and help you to find the best way to sell poorly performing merchandise. By assessing these things at an item-by-item level, you can avoid an oversupply of non-productive and unprofitable stock, and instead invest in the products that sell.

Getting started

So, how do you get started? Well, it starts with the data, and that’s where we can help. Whether you are using dedicated inventory systems like Cin7 or Unleashed, a brick-and-mortar POS such as Vend, Lightspeed, Revel or Kounta, or even an e-commerce store like Shopify - well, SyncHub has you covered. Even if you don’t know much about BI forecasting, grab yourself a free trial, connect to Excel and just have a look at your data.

It won’t cost you a thing to get started, and you never know what you might find.

Have fun!