Too much inventory piling up is robbing companies of working capital and profit. It's in the news constantly these days and is reflected in retail stocks profit projections and ultimately, their stock prices. Who invests in companies that can't control their inventory?We see evidence of this almost every inventory we conduct. It seems particularly a problem in our convenience stores and liquor store customers but also, some of our pharmacies as well. So what do they have in common?It seems to be two different issues. The first commonality we see is vendor maintained inventory. Supply chain specialists will tell you it's called channel stuffing. The vendor lures the management into purchasing a product for which there is little demand, usually by offering a promotion that seems to good to pass up. It makes their books look go but for you - not so much.The second problem we see is an age old retail problem. Product that has been around so long it has passed Sell By dates (expired drugs??). I have encountered product that is years old, given it to management (dirt and all) and watched them clean it off and put it back on the shelf. Some of this issue is probably based on problem one - channel stuffing - but some of it is also based on our desire to be all things to all people. And of course, our forecasts don't match our customers demand.For many of our customers, the solution is right before them. Modern Point of Sale systems give you sales information that can change from forecasting to a pull method of replenishment. Most of the product in C-stores, liquor stores and drug stores is available from vendors within a very short period of time. Gone are the days of having to order a 12 week supply. You are seldom farther away than 2 weeks from order to fulfillment. Why shouldn't you take advantage of that? Don't let the vendor talk you into promotions that give you so much product that you clog you shelves forever. I can't begin to tell you how many of last year's Captain Morgan rum and Jack Daniels I see still in stores. All for a few dollars discount.If you need help figuring some of this stuff out, simply give us a call. We can help. We don't just count your inventory.
