If your inventory levels are never quite right during the holiday season or your supply chain performance consistently lets you down, this guide is for you.
We’ll show you how to properly analyze your inventory needs, forecast more accurately, and create an action plan ready to hit next season’s sales targets.
1. Analyze Demand Forecasting Accuracy
If you have your holiday data from prior years, you can analyze your actual sales vs. predicted demand. Were your forecasts accurate? Did you hit projections for each product or category?
If you do notice significant shortcomings in your forecasts, were there any obvious factors that had an impact? This could be industry shifts, supply chain issues, etc.
Analyzing the numbers can be tough if you’ve failed to meet targets, but it’s a necessary process to improve your numbers next season.
2. Evaluate Inventory Availability
Next, look at your fill rates and stock-out percentages. To calculate your company’s fill rate, use this formula:
Fill Rate = (total completed orders / total orders) x 100
You should get to as close as 100% as possible, but if you’re off, now is the time to look into the reasons why.
Similarly, your stock-out rate is the percentage of items not available when needed for sale. A high stock-out rate means missed opportunities for sales and even a negative customer experience, which can negatively impact return rates.
If you noticed low fill rates or high stock-out rates this year, look at the root causes. This should be a high priority when we get to the action plan at the end of your assessment.
3. Assess Fulfillment and Lead Times
A Harvard Business Review study showed that only 20% of consumers forgive online retailers for delivery delays due to supply chain issues. Same-day and next-day delivery are rising, and customers now expect incredibly fast, streamlined fulfillment.
During your holiday season assessment, note down any differences between planned and actual processes and shipping timelines. Were there any significant bottlenecks or capacity limitations that prevented you from offering timely delivery and order fulfillment?
As we move into the new year, it’s a good time to think about order processing and shipping software upgrades that could better prepare you for your next holiday season.
4. Review Procurement and Redistribution
Were your product receipt windows accurate this season? Did you have an effective process for rerouting excess inventory?
If you notice challenges with procurement and redistribution, new opportunities for dropshipping or consignment could help streamline your business. Dropshipping eliminates the need to house excess stock, saving time and money on warehousing.
5. Analyze Logistics and Warehouse Ops
Only 18% of SMBs utilize inventory management systems for warehousing, which leaves a lot of room for error – or a significant opportunity for those with robust inventory management systems to differentiate from the competition.
Record pick-up time and delivery percentages, cost and capacity restraints, and any training or process issues during your review.
Statistics show that by implementing an integrated inventory and warehouse management system, you could see a 25% increase in productivity, a 20% gain in space usage, and a 30% improvement in stock use efficiency.
If you notice pain points in this area during your holiday inventory assessment, improved warehousing software should be high on your list of technology roadmap priorities.
6. Takeaways and Action Planning
Now that you’ve collected the data, it’s time to distill it into key findings and lessons learned for the holiday season. Focus on big wins, milestones hit, and records achieved, and highlight these achievements with stakeholders and decision-makers.
Now is also the time to improve your forecasting and create an action plan for future holiday seasons:
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Use this year’s data and previous years' data to forecast sales for next season.
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Make plans to imitate any marketing or promotions that had great results.
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Highlight bestselling products and services to push future marketing efforts.
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Outline what went wrong and how you will improve next time.
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Add any important software upgrades to your IT roadmap for the next three months to streamline your inventory levels and supply chain performance.
Smash Your Holiday Season Goals With Improved Systems
The holiday season is a significant sales period for most SMBs. It’s crucial that your inventory levels and supply chain performance are streamlined to support business growth and customer satisfaction.
If you have noticed bottlenecks or supply chain issues this holiday season, now is the time to implement new software to reach next year’s goals.
Connect with a StackPlans tech advisor today for expert advice on the most effective software upgrades for your business needs.