No one knows more about the importance of finding the perfect balance than daredevil tightrope walkers. They are constantly pushing boundaries and defying the odds while attempting stunts that stun audiences. Some famous landmarks like the Grand Canyon, or iconic buildings like the once Twin Towers, have been crossed by those with nerves of steel. But probably the most well-known is Charles Blondin, who on the 30th of June 1859 became the first to cross a tightrope suspended above Niagara Falls.
Charles Blondin crossed 1,100 feet on a 2-3-inch tightrope suspended between 160 and 200 feet in the air. He then went on to cross this same tightrope blindfolded, lay down on the tightrope in the middle of another attempt, and offered to push a volunteer across in a wheelbarrow on yet another. It’s no surprise that there were no takers for the wheelbarrow.
Stunts like these require incredible precision and practice. One wrong move can lead to tragedy. In the retail and wholesale industry, this same sort of precision and practice is required when it comes to inventory purchasing. There is a fine balance between purchasing too much or too little inventory. The risks for a small business are high. Purchase too much and you run the risk of losing money, purchase too little to serve your clients and they are likely to go elsewhere to find what they are looking for.
Then again, balance isn’t just for the inventory purchasing stage but the whole end-to-end process. It’s no use starting to walk a tightrope only to get stuck in the middle. For retailers and wholesalers seeing the process through from start to finish is all part and parcel of the inventory management tightrope.
Planning, processes, good management, good systems, real-time data, and foresight are important to a business trying to strike the right balance. There are companies out there getting it right and rocking their inventory management so we’ve gathered some information on the lessons they have to share.
1. Edison Stone
Using historic data for decision-making
Nicole Reid, Inventory Planner from Edison Stone, a brand house which develops and represents top brands and products for the kitchen & homeware market, says they rely heavily on historic data and trends to identify cyclical norms that provide Edison Stone with insight into future inventory purchases.
The record-keeping process around items and products that sell is a key indicator of sales performance over time and drives part of the decision-making process. These patterns can help accurately predict the stock required for certain items and guide business owners when it comes to striking the right balance between supply and demand.
The Edison Stone team also make use of inventory management software that helps to track all data points for the decision process. These systems ensure that they can run a tight ship and maintain a constant flow of stock for their customers and smoothly execute the picking, receiving, packing and dispatching of all products.
Experience, communication and systems
Nicole believes that an experienced warehouse team, strong communication, the right inventory system, and the support and involvement of top-level management are all part of what makes Edison Stone’s inventory management successful.
Cashing in on efficiency
takealot offers an extensive range of locally supplied and imported books, DVDs, music, games, electronics and toys. They make use of a software solution called RELEX to help them with their forecasting, inventory management and stock assortment to reduce their time on routine ordering.
Distribution and dispatch processes
As an inventory-holding eCommerce business, they place a lot of focus on their distribution processes. Having acquired stakes in Mr. Delivery they have invested heavily in great service delivery. This investment in their dispatch service gives them control over their deliveries and adds another dimension to their business. This means they can do same-day delivery and after-hour deliveries while also having control from the distribution centre right through to the customer.
Organise and identify
Grethe van Rensburg, Operations Manager at Spree, says ‘it’s important to organise and identify products from the start. This includes clear descriptions, information and categories.’ Making sure inventory counts are accurate and updates are done in real time is important for them as an online retailer. This helps them ensure that processing can be done quickly, accurately and seamlessly.
Customise if you need to
Spree has made use of its own in-house planning, merchandise and warehouse management system specifically catering to the complexities that come with eCommerce. Grethe stresses the importance of real-time updates in order to stay on top of things and for all systems to work from an end-to-end process so that no balls get dropped along the way.
Don’t waste time
The mammoth eCommerce and cloud computing company, Amazon, have a few secrets of their own when it comes to inventory management. When items first arrive, they don’t waste time scanning and sorting. In fact, during peak seasons items are logged and scanned within the first 12 hours of arrival so that everything is always tracked on their systems.
The hands-on approach
However, even this successful company doesn’t rely solely on computer systems. They utilize warehouse workers on the ground who are armed with barcode data collection software to ensure they keep up with shipments at these times. A lot can be said for this hands-on approach if big companies like Amazon are making use of practices like this.
Organise your warehouse
When it comes to warehouse planning it is reported that they keep similar items separate from each other to avoid human error from workers accidentally grabbing the wrong item. Their most popular items are located in multiple locations to prevent bottlenecks that occur when too many people converge on one spot.
Every business is different and the challenges won’t be the same. But it can be helpful to learn from those who have been down the road, figured out what works and have empowered their business to operate efficiently so that they can serve and delight their customers.