Halloween
isn't quite here yet, but malls and department stores are already putting their
Christmas decorations on display. These little reminders of the approaching
holiday season also remind me that it's almost time to start the gift-giving.
I can
remember a few times I've been out shopping around the holidays and tried to
find something that wasn't on the shelves. When that happens, if it's something
you really want to buy, you might go talk to one of the store's employees to
see if the item you want is in the “back room.”
The “back”
of the store or the “back room” is sort of an illusion we create. I kind of
picture it like this: You go through a normal-looking stock room door, and
there before you are rows and rows of gleaming products that are just waiting
for intrepid customers to find them. For some reason, it's hidden away, but we
seemed to have convinced ourselves that it is back there somewhere and surely
there is still hope that we can buy it!
Most of
us in supply chain management, especially in retail, know that
there is no magical “back room” with extra stock just sitting there waiting for
someone to ask about it. The inventory presented in the storefront is pretty
much it.
There is
a good reason for that: having inventory
on hand costs money. In a recent Global Supply Chain Podcast series,
inventory expert Ralph Cox and I talked about how increased product availability
does not create additional sales for every business. This is especially true
now, with web site sales as an option.
Web site
purchases allow stores to make a sale even if something is out of stock. And by
partnering with an excellent 3PL that can get the item to the customer with
incredible speed and efficiency, not having a product in stock is no longer a
major disadvantage.
Ralph and
I talk more about how inventory can create profitable growth for a company, not
just in retail but also for other industries, in this podcast. Listen here or
see the text transcript.
I would
love to hear some of your inventory stories. Is your company handling inventory
any differently this season?
GoGoGo!
Jim
More Resources:
Article:
25 Ways to Lower Inventory Costs
Hot Topic
Report: Finished Goods Inventory Management
Executive
Briefing: Sales, Inventory and Operations Planning: Crossing Organizational
Boundaries
White
Paper: Evolution to World-Class Inventory Management
Photo Credit: Pacific Northwest USCG