As things slowly begin to shift back to normal, most customers and suppliers are probably just happy about that! They are not thinking about next week’s, let alone next year’s, inventory and their ability to plan for it. The problem is that factors like company closures and the decrease, or in some cases increase, in demand over the past few months are going to have a major impact on your next's year's forecasting.
Right now, you are probably thinking, “Our inventory is in great shape, so we are fine.” That may or may not be the reality. Today’s inventory may look great, but what happens next year when customers are running at full force and that demand of 100 for March, April, and May this year returns to 250 like in previous years? What steps are you taking today to account for that?
Preparing for the Future: Proactive Steps You Can Take
If you're equipped with forecasting software, you're presented with a few choices. You could either maintain the status quo, hoping inventory levels will balance out, or you could proactively enter "clean-up" mode. As someone who has experience in purchasing, I understand the reluctance towards clean-up tasks, often viewed as tedious and insignificant. However, these tasks play a crucial role in preventing unexpected issues later on.
So, what exactly are these tasks? With most forecasting tools, you have the ability to manually adjust the data to include, exclude, or modify quantities. Now is the opportune time to make these adjustments, while the details are still top of mind. This may involve generating reports more frequently, applying filters for a detailed analysis, or reviewing specific item groups or vendors. Don't hesitate to involve your sales team; their insights into customer trends can be invaluable. Remember, effective purchasing requires a collective effort from the entire company to maintain optimal inventory levels.
But what if you're operating without forecasting software? Rest assured, this isn't a segue into a sales pitch. While forecasting can be beneficial, it's not universally applicable to all businesses. Without it, you're not at a standstill. It simply means you need to scrutinize your data more closely. Perhaps it's time to reevaluate your reorder points or consider the benefits of forecasting—there's the subtle nudge towards it.
Whatever path is right for your business will become clearer over the next few months. Now may not only be the time to review your inventory but also to start talking with vendors about pricing and contracts. Hey, maybe they have some extra stock that they would be willing to part with for a good price!
We Are All in this Together!
If you find yourself having either too much or too little inventory, know that you are not alone. These are uncharted waters for all of us, but the right tools and staff can help navigate the way.
One strategy that might help is to implement Vendor Ratings at your business.
