We’ve previously considered the importance of strong inventory health to your success in wholesale/distribution.
The health of your entire business is crucial though so here are 10 symptoms of larger problems you should be looking out for:
- Responding to disruption and supply/demand volatility is painful without substantially increasing safety stock levels.
- Running promotions tends to lead to stock availability issues.
- Misunderstandings or lack of communication leads to tension between various functions in the organisation – finance, marketing, supply etc.
- Under-performance of new products results in missed profit or volume targets.
- Excess, ageing or deteriorating inventory is not being cleared profitably or in a timely fashion.
- Unreliable delivery performance impacts on ability to provide dependable delivery dates and leads to a need for carrying excess inventory.
- Supply and demand are not aligned, resulting in excess inventory and unprofitable unplanned price reductions, or stock-outs.
- A lack of sustained focus on the most profitable customers, products, sales channels and supply sourcing.
- An inability to effectively manage de-ranged products.
- Failure to quickly identify and leverage market opportunities or mitigate difficult conditions and risks.
The difference S&OP can make
Once you are experiencing several of these symptoms, their cumulative impact can quickly create additional costs such as overtime or long hours required to manage the end-to-end business.
Effective S&OP eliminates the conditions under which these symptoms appear. But it requires actionable information and alignment to the ‘rhythm’ of your business and the market. This cannot be achieved through ERP alone, many businesses struggle despite investment in systems to hold their data.
Harnessing the power of data
Those businesses that are able to take the data held in their ERP system and use it to drive actionable insight are significant, there is a clear impact on their bottom line.
Using the AGR software, our customers are able to:
- Cut stock-outs by 10–25% and improve service levels
- Reduce obsolete stock write-offs by 5–20%
- Release 15–25% of your cash from unnecessary safety stock
- Reduce the resource costs of inventory replenishment (10–25%) and inventory management (33–66%)
Let us show you the impact that the AGR software can have on your S&OP and ultimately your bottom line – get in touch today to see just how much of a competitive advantage it could give you.
