Let’s face it, replenishment planning might not seem like the world’s most glamorous topic, but it’s one that will put some money back in your pocket and relatively painlessly, too. In fact, it can end up being a win-win both for your customer service team and your bottom line if you do it in an intelligent way–what’s not to love?
Don’t Get SKU’d Over
Inventory management for a lot of companies means carrying more than 3x their normal stock because of uncertainties related to imports from other countries, transportation, weather, plagues, etc. It’s just one attempt at agility in the face of uncertainty. Another is to set different fill rates for different SKUs.
If your fill rate is 95%, then if someone wants to order your product, it’ll be in stock 95% of the time. But what happens if you drop that rate to 90%? If someone places an order today, you have to tell 10% of those customers that they’ll see delivery next week instead of today.
Risk Does NOT = Return
This is where ketteQ can help by letting you play with the “what if” scenarios and numbers–we use Artificial Intelligence/Machine Learning (AI/ML) to help you turn the dial up on customer service ratings while dropping your fill rate on a particular item. Determining which items to stock at 95% vs. which ones to drop to 90% is simply a matter of looking at that item’s history–and forecasting future demand, too. It’s also all about that dollar, and you’d be surprised how many millions you might actually save just by twiddling some dials!
The conventional wisdom is that you need to take on more risk to get a better return, but that’s just not true! You can optimize returns by minimizing your risk, and to do that, you need intelligence–having data means you can reliably and accurately lower the risk while actually improving your customer service.
Simply put, the money you spend in inventory could be better spent elsewhere if you optimize your safety stock level, that is, your fill rate. ketteQ can help you create an order plan that matches demand. Let’s see how we can help you save millions with a quick discussion with our CEO, Cy Smith.