Making sure you have the right number of weeks of supply on hand at distribution centers can have a big impact on your business. Having too much inventory can waste money on spoiled product or storage costs for taking up space in the DC, as well as tying up operating capital in unsold product. Having too little inventory means you may not have enough to meet demand which can limit sales and disappoint customers.
For many connectors, you can track inventory at the DCs to make sure you keep inventory at that sweet spot and meet your profitability goals. In this example, we will identify a single product with low weeks of supply and how to remedy inventory issues with that product.
Steps:
- From the dashboard menu, locate a retailer/wholesaler that has an inventory dashboard and select it (e.g., UNFI > Inventory).
- From the Current Inventory table, filter the table in descending order by the Weeks of Supply column, so you can see which products have the least number of weeks of supply.
- Review the products to see if any have low weeks of supply and an amount in the Quantity on Purchase Order column that is lower than what you would expect given the value in the Average Quantity on Hand column. In this case, we can see the banana cookie product has no units on purchase order despite the low weeks of supply and below average on hand quantity.
Note: The optimal weeks of supply will depend upon many factors, such as the shelf life of your product and whether or not you are running a promotion or demo, make sure to account for these factors when you are evaluating your weeks of supply.
- Select the cookie product we identified in the previous step to filter the dashboard for this product, so we can investigate it further.
- From the Quantity on Hand by DC table, filter the table by the Weeks of Supply column in descending order. In this case, we can see that the Pompano and Anniston DCs are likely driving the overall low weeks of supply.
- For these DCs, work internally with your employees to make sure you are consistently shipping on time and in full.
- If there are no issues with shipping on your end, you can try one of the following solutions to remedy the issues:
- Check with your buyer to see if the forecasting system on their end is accurately gauging inventory needs.
- If the forecasting system is accurate, check with your buyer to see if any other system issues are preventing your product(s) from moving from the DC to stores, such as a product being labeled inactive or incorrectly categorized in the inventory system.
- You can repeat this process for other products with low weeks of supply, or repeat a similar looking at products with high weeks of supply to find and take action on product/DC combinations that have too much product on hand.