4 strategies to conquer lean inventory challenges

Retailers are navigating the post-pandemic landscape with a shift toward lean inventory management, aiming to maximize inventory efficiency. This adjustment places suppliers in a tricky spot, walking a fine line between insufficient production and excessive stock.

Maintaining the right inventory balance requires a clear understanding of demand that relies on point-of-sale (POS) data.

Let’s take a closer look at four ways suppliers can thrive in the lean inventory era.

1. Establish routine inventory health checks

Start with a robust routine for monitoring your inventory and sell-through data—a proactive approach empowers you to align your stock levels closely with current demand trends. Regularly assess stock levels, checking on inventory by both product and location. This way, you can avoid potential stock issues by catching discrepancies early and adjusting before minor issues become significant problems.

2. Foster open dialogue with retailers

Lean inventory management depends greatly on how you communicate with retailers, and data is the common language. Proactively engage with retailers, sharing insights and analysis from point-of-sale data. This isn’t just about addressing current needs, but also anticipating future demands and challenges. By presenting data-backed suggestions, you can help your retail partners make informed decisions, optimize inventory levels, and meet consumer demand without overstocking.

3. Focus on successful end-of-season outcomes

Achieving successful end-of-season outcomes in a lean inventory environment requires keeping a close eye on the health of your product assortment across various locations. By ensuring you have the correct on-hand inventory levels, you can capture more sales while avoiding excess stock and costly markdowns at the end of the season. To start, proactively identify potential stockout risks weekly and use this opportunity to reallocate inventory from locations with surpluses. With the right data and some proactive spot-checking, you can maximize the value of your inventory investment by ensuring your products are in the right place at the right time.

4. Plan with precision for future seasons

Use the insights from your ongoing analyses and conversations to plan for future seasons with greater accuracy. By applying the lessons learned from each season’s data, you can better predict future demand, tailor your inventory more closely to retailer needs and continue to refine your strategies. Identify which products performed well, see emerging trends and adjust future production plans accordingly. The cycle of feedback and adjustment will help you remain agile and responsive in a constantly changing retail environment.

Ready to elevate your inventory strategy? With SPS Analytics, you gain direct access to our team of Retail Intelligence experts who are ready to guide you in using point-of-sale data to drive inventory decisions. For a deeper dive into how data can transform your inventory strategies, contact our team or visit our website today.

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SPS Analytics Retail Intelligence Team

The SPS Commerce Analytics Retail Intelligence team specializes in leveraging Point of Sale data and analytics to provide actionable insights for retailers, distributors and suppliers, helping them optimize their supply chain operations and improve sales performance. The team empowers businesses to make informed decisions and stay competitive in the fast-paced retail landscape by utilizing advanced data analysis techniques and industry insights.

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• 4 strategies to conquer lean inventory challenges - March 21, 2024