Retail Technology Tip #3 From Storis: Timing is Everything!
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With over 25 years of helping retailer’s manage their inventory, we have learned a lot about what methodologies can drive profitability and help a business grow. For retailers who carry a regular assortment, Just in Time (JIT) inventory management
is a strategic way to manage your merchandise. The goal of JIT is to increase your cash flow while lowering expenses and meeting customer sales. JIT works by balancing all of the components that go into your merchandising strategy. Below we highlight what is behind a successful Just in Time plan and how software can help you.
1. Demand Forecasting
- Retailers need to have the ability to accurately forecast consumer demand and shopping patterns for their merchandise. Software can help you monitor trends and anticipate demand in real-time without having to do any manual tracking. A good system uses current and historical sales data for the most precise projections.
2. Lead Time Monitoring-
JIT is dependent on your vendors’ fulfillment capabilities. It is important for retailers to have an understanding of their average vendor lead times. Lead times mean how long it takes for the inventory to arrive to your warehouse from the time your vendor receives their PO. Software allows you to set settings for each vendor individually, including building in conservative pad days, to ensure you are calculating smart.
3. Internal Inventory Control-
Another critical component of JIT is making sure your store’s inventory is properly accounted for. This means tracking current on-hand quantities, statuses and location of all pieces. What you have available in stock is the foundation of being able to calculate a replenishment plan. If you have multiple stores, warehouses and also sell through eCommerce, an inventory management system is even more imperative. Software can keep track of all your inventory, no matter where you sell or receive it, through a centralized database.
In addition to what you have in stock, you also need to consolidate what you already have on pending purchase orders. Software will account for on-order and in-transit inventory values, so you are not leaving out this important piece when planning a PO.
Just In Time is a straightforward strategy to take advantage of, especially with the help of a fully integrated inventory management system. This methodology cycles your inventory in a way that allows you to sell more with less inventory. If you know the flow of your inventory you can anticipate needs, rather than reacting to inventory shortages or over-buying in the first place. JIT can help you free up cash flow all while making sure opportunities for sales don’t fall through the cracks.
Founded in 1989, STORIS continues to be the leading provider of Retail Software Solutions and Services to Big Ticket retailers of ALL sizes. Over 350 Clients utilize STORIS’ single ERP solution including point of sale, mobile processing, supply chain management, customer care, accounting, ecommerce solutions, business intelligence and more.
For more information visit www.STORIS.com
Technology Tips From Storis
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