Content:
Potential challenges in inventory management
How to manage inventory with Datawiz BI
Tools for inventory management of products
Inventory management is the cornerstone of retail success
Retail inventories are one of the most important items for the successful and smooth running of a chain. These are the tangible current assets that ensure a constant supply to customers.
It is important not only to regularly replenish shelf layouts in the sales area, but also to "keep a finger on the pulse of the warehouse": to make purchase orders in time, to avoid surpluses, to monitor and change the assortment depending on demand and seasonality.
This requires effective stock management.
Potential problems in inventory management:
- Human Factor. In the process of inventory management employees make decisions intuitively, based on their own vision or experience, and operate with irrelevant data without taking into account changes in the global market.
- Incorrectly calculated products order. The assortment is compiled and ordered "by eye", not based on real data on demand and current stock.
- Incorrect sales planning. In order to make the right order of products, you need a correct sales plan. We discussed chain sales planning here.
- Ineffective category management. The detailed elaboration of data on the popularity of products within a category should be aimed at reducing surplus and improving turnover.
- Forced logistics. Due to incorrect stock calculations products have to be moved between stores or returned to the supplier.
All these aspects are a consequence of the main problem: absence of tool for correct stock management.
How to manage inventory with Datawiz BI
Implementation of AI technologies and automation of business processes in the retail chain allows minimising risks and miscalculations in inventory management.
Datawiz BI service contains reports on all necessary metrics as well as Builder data visualisation tool.
Tools for inventory management of products
- To correctly determine how much stock is needed, it is worth referring to sales. By analysing the sales dynamics it is possible to see the state of demand for certain items, and correctly adjust the order of products. On Datawiz BI service there is an opportunity to track the assortment activity: by setting up the necessary sections you will see the status of the products and categories you need for the required period.
- ABC-analysis is a universal and popular tool for both sales analysis and inventory planning. However, it is impossible to perform a full-fledged sales analytics on the basis of one type of analysis: earlier we prepared a guide to the main methods for you.
- Since inventory involves a significant financial investment, it is important to understand how profitable it is. For this purpose it is important to use the GMROI (Gross Margin Return on Investment). This indicator gives a clear assessment of the retailer's ability to make a profit from the ordered product range.
- Now that you have analysed and understood the benefits of your planned order of products, it's time to determine the economic quantity.
EOQ helps to avoid intuitive decision making with respect to stock creating.
EOQ is effective when current stocks have already been analysed and taken into account beforethe order is placed. You can generate reports on the BES platform to analyse stocks.
In order to replenish stock in time and avoid missed sales, you need to build effective relationships with your suppliers. With the help of the built-in Supplier Access module you can establish information interaction with suppliers of products, exchanging real data.
For example, one of the most demanded indicators can be the forecast on out-of-stock: monitor sales dynamics, predict possible product holes and provide this information to the supplier to maintain the necessary level of stock in the warehouse.
Conclusion
Effective management of your inventory involves taking into account a large number of analytical indicators which provide the foundation for reasoned business decisions.
With Datawiz BI you can avoid miscalculations, freezing funds in products and surplus stock.
