4 min read

Understanding The Concept of Inventory Discrepancies in Warehouse Management

April 12, 2022 by Srishti Arora - 4 min read

Inventory management forms an integral part of your eCommerce supply chain. It seems like a simple process; however, it has a lot of aspects to it that need to be taken care of. Since inventory is constantly moving, it can get lost, misplaced, or stolen.

Tracking your inventory is essential and keeping accurate records is even more critical. In case of any problems, you will need to get to the root cause of why a discrepancy in the inventory exists. 

Let’s look at inventory discrepancies and how to avoid these discrepancies to save yourself from losses. 

What is Inventory Discrepancy?

Inventory discrepancy refers to a situation in which the inventory amount differs from the inventory records.

With automated inventory management software, inventory discrepancies are usually uncommon, but they can lead to a loss of profits if present. Therefore it is crucial to keep track of the record and maintain a thorough inventory reconciliation process. 

Causes of Inventory Discrepancies

Lost Inventory

The first and foremost cause of inventory discrepancies is lost inventory. Sometimes inventory can get lost or misplaced due to human error, which usually happens during receiving, or stocking. This can also include the inventory that might be wrongly labeled, stored in an incorrect location, or the wrong quantity of product invoiced incorrectly. A thorough receiving process is essential to avoid such instances where a gatekeeping record is maintained.  

Inventory Shrinkage

The next course for inventory discrepancies could be inventory shrinkage. Inventory shrinkage can be caused by accounting error, theft, or fraud. Implementing processes like employee training and warehouse security can help reduce inventory shrinkage. 

Outdated Technology

If you do not constantly update your inventory management software and use outdated technology, you can see a surge in inventory discrepancies as the tracking systems will not be updated. If you still employ manual processes for inventory tracking, you are more prone to error and high inventory discrepancies. Therefore it is essential to deploy automated inventory management software to ensure that the inventory is tracked in real-time. 

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Inaccurate Returns Management

Inaccurate returns management is also a reason for inventory discrepancies as return products, if not stored correctly, can lead to mismanagement of records. Return items can get damaged in transit, donated, or disposed of, and therefore keeping up-to-date records can help reduce instances of inventory discrepancies. 

Untrained Employees

Human error is prone to happen if the employees are not trained correctly in inventory management. Most inventory discrepancies occur when there is a loss of knowledge while storing goods. Maintaining standard operating procedures and training employees regularly with updated technology can help reduce this. 

Tips to Avoid Inventory Discrepancies

Tips on how you can avoid inventory discrepancies

Train Employees

The first step to avoiding inventory discrepancy is to train employees thoroughly in the warehouse processes and inventory management operations. This will help you run operations smoothly, keep track of inventory regularly, and optimize the supply chain.

Use Latest Inventory Management Systems

Using the latest inventory management systems can help you track inventory in real-time and reduce instances of inventory discrepancies. Most methods today consider the return orders and ensure that you have stopped goods correctly by using bar codes, RFID chips, etc.

Communicate With Suppliers

It is imperative to communicate correctly with suppliers to ensure the correct quantity of goods sent and the proper invoicing so that your warehouse does not suffer any drawbacks.

Partner With 3PL Fulfillment Providers

Partnering with a 3PL fulfillment provider can help you reduce inventory discrepancies as they usually have the latest warehouse management and inventory management software at their disposal. This will help you take the load off your shoulders, and you can thoroughly track inventory from the comfort of your office. 

3PL fulfillment providers like Shiprocket Fulfillment can help you store inventory properly in multiple warehouses across the country, and you can carry out other essential operations of your business seamlessly. Shiprocket Fulfillment takes care of all fulfillment operations for your business, and you do not need to be worried about the smallest of things like inventory discrepancies. With a skilled team to handle operations, you can quickly process faster and deliver sooner. 

Final Thoughts

Concepts like inventory discrepancies can seem small on the surface but usually can be troublesome if inventory is not tracked correctly. Make sure that you carry out inventory tracking operations seamlessly to ensure that no discrepancies are there. Also, these operations can take a massive bandwidth of your day. Consider outsourcing to 3PL fulfillment providers to make processes easier for your business. 

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Apr 12, 2022 by Srishti Arora

4 min read

What is Physical Distribution in Supply Chain Management

February 1, 2022 by Rashi Sood - 4 min read

Physical Distribution in supply chain management is the way retailers make their products available to the end consumers. It’s one of the major aspects of the supply chain that you need to master to ship your goods to market in the fastest way possible.

Physical Distribution

Physical distribution deals with the series of steps from production to the consumer. The channels involved in the process are:

  • Warehousing
  • Inventory Control
  • Order Processing 
  • Materials Handling
  • Transportation
  • Customer Service

The physical distribution gives the ability to make a product available to a consumer quickly and conveniently to the nearest location. Also, creating fast and reliable physical distribution can help assure continued success in a rapidly changing and competitive global market.

Elements of Physical Distribution

Physical distribution is a way for the efficient movement of products in a supply chain. There are elements of physical distribution that are interrelated to each other and affect the efficiency of others. 

Physical Distribution

Transportation

Transportation is an important part of physical distribution management. Different transportation modes are LTL, Parcel, Air Freight, and Ocean Freight which enable retailers to make their goods and services available at the customer’s doorstep.

Truckload

Trucking is the best shipping method for most enterprises in India. It is best for carrying manufactured products in bulk for fast and economic delivery to more destinations in the country. Trucks are particularly useful for both large and small shipments and they offer relatively fast shipments.

Intermodal

Intermodal shipping is best suited for small business owners. It utilizes a combination of rail and truck transportation for specific shipments. The costs of the shipments are significantly lower than trucking methods. 

Air Freight

Air Freight is typically good for the movement of valuable or perishable items. It is a costly mode of transportation for small businesses. But, the high cost of air transportation can be reduced with the inventory-holding costs and the increased business opportunity that may also ensure faster customer service.

Ocean Freight

Ocean freight is transporting of goods via sea in shipping containers. It is also the most common mode of transport used by importers and exporters for foreign shipments around the world.

Parcel

Parcel delivery is the most important element of physical distribution that is provided by most express shipping companies, private courier companies, and less than truckload shipping carriers.

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Warehousing

Warehousing refers to the process of storing goods, receiving inbound shipments, breaking down items, eCommerce fulfillment, and delivery to the customer. Warehouse distribution generally deals with storing goods for longer periods, whereas fulfillment centers operate as central distribution locations for quick shipments of the finished product to customers.

Order Processing

Order processing is also a part of the physical distribution function that varies from industry to industry. It directly impacts the ability of a retailer to meet the order processing system efficiently.

Inventory Control

Inventory control is a major element of a physical distribution system. It is the process to keep inventories in the desired location while continuing to adequately supply inventory items to customers.

Materials Handling

Material handling is another important element of the physical distribution system that comprises all of the activities associated with moving products within a production facility, warehouse, and transportation terminals.

Customer Service

Efficient customer service is an important business function. It plays a crucial role in a business’s success. It refers to the method of customer satisfaction that a small business provides to its customers. Providing optimum customer satisfaction increases repeat purchases.

Final Words

Physical distribution is important for eCommerce businesses as it ensures that their supply chain is handled with care. It is critical to streamline the physical distribution of goods and better accommodate fluctuating supply and demand throughout peak seasons and volatile market conditions. Request more information to see how Shiprocket Fulfillment can help you with your business agility.

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Feb 1, 2022 by Rashi Sood

5 min read

Procurement & Supply Chain Management: Knowing the Difference

January 27, 2022 by Rashi Sood - 5 min read

To handle the rapidly changing customer demand and compete in the cut-throat competition, all business owners need to know the different supply chain terms and operating models. The supply chain is an interconnected network and plays a crucial role in delivering customers a satisfactory experience. Furthermore, planning, manufacturing, procuring, managing inventory, and logistics play a vital role in running a business efficiently and achieving business objectives.

procurement and supply chain

What is Procurement?

Essentially, procurement is the process of acquiring goods and services from the manufacturer to carry out your operations. Product procurement is a part of supply chain management, and it covers the following:

  • Identifying suppliers and finalizing one
  • Planning product purchase
  • Deciding product quality
  • Negotiating prices
  • Identifying financing options
  • Acquiring products and services

The aim of acquiring products is to have stock in hand to meet customer demands without delays. The main stages in procurement include preparing and processing the product demand and its payment approval. The other aspects include acquiring inventory at the best possible rates and ensuring its good quality and quantity.

Importance of Procurement

Most businesses would find it difficult to operate without procurement. But avoiding delays, errors, and maximizing resources is just a part of the reason why procurement management plays an important role. It ensures that a business acquires all products and services on time and successfully. It also offers a business competitive advantage as it helps optimize resources and save time and money.

The supply chain has become bigger, and procurement has become its essential function. It offers strategic support to a business to grow in terms of revenue. With procurement management, you can negotiate supplier contracts, adopt innovative processes, and take your business to better and bigger levels.

Steps in Procurement Process

Managing products, goods, and services procurement consists of several steps and processes. Though these differ from one to another organization, they typically can include:

Step 1: Planning and Specifying

To establish a need for a product or service, it is crucial to specify the product itself. You also need to understand what type of product is to be ordered and when to be reordered. And for that, there is a need for planning and forecasting – you can take the help of data and projections for this.

Step 2: Identifying Suppliers

Identify suppliers and choose the best among them to meet your product needs. You can either acquire products from an already established relationship or research new suppliers and send them proposals and quotations.

This step doesn’t end here. Negotiate the prices and terms and conditions with your chosen supplier. Also, clearly communicate your requirements and expectations with them.

Step 3: Place an Order

When you place an order, specify the quantity, product specification, price, delivery date, and all other terms and conditions of the products to be supplied. The Purchase Order is also the source of truth.

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Step 4: Expedite the Order & Inspect the Purchase

Sometimes, expediting the order is necessary due to various reasons. You can examine the timeliness, which may help reveal underlying issues like payment dates, delivery time, etc.

Next, review the orders and inspect their quality and quantity. Ensure that the products are up to the mark and are right in amount. You can match the received order concerning their PO (purchase order). If what is delivered to you is not as per the PO, raise a concern with the supplier and replace the products.

Step 5: Payment

The last step is to complete the payment process after inspection as per the amount agreed on the invoice. Notably, it is vital to record all the order receipts and records for auditing and tax purposes. These receipts will also help you confirm the product warranty, and you can use them for the reordering purpose as well.

If required, share your feedback with the supplier for possible improvements and changes.

What is Supply Chain?

The supply chain is an extensive network of product manufacturers, suppliers, logistics enablers, and all other parties involved in getting the manufactured product to reach the end consumer. It also involves raw material providers, transportation companies, warehouses, and enablers that help move the product.

Evidently, product procurement and sourcing are a critical part of the entire process.

Now, let us talk about supply chain management; it is an act of managing the entire supply chain process professionally to ensure maximum operation efficiency. The ultimate goal of managing the supply chain is to reduce storing access inventory while also ensuring that you meet all demands. So, supply chain management includes activities ranging from procurement to product delivery to the customer.

Procurement VS Supply Chain Management

While supply chain and procurement are directly related, these two functions can’t be interchanged. Procurement is the process of getting products, services, and materials that you require. The supply chain transforms the acquired goods and services into the final products to be distributed to the customers as efficiently as possible.

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Jan 27, 2022 by Rashi Sood

4 min read

What is ERP Inventory Management & Its Significance in eCommerce Fulfillment?

January 25, 2022 by Srishti Arora - 4 min read

Inventory management is an integral part of your eCommerce fulfillment supply chain. If you are not handled correctly, you can face several challenges. These challenges can turn out to be very heavy on your pocket. Therefore, you need a centralized inventory management system that can help you eliminate most challenges and make your supply chain more efficient. 

ERP Inventory Management

ERP inventory management is one such system that can help you reduce inefficiencies and make your supply chain more organized. 

Understanding ERP Inventory Management

ERP is short for Enterprise Resource Planning. Enterprise Resource Planning inventory management refers to a unified management approach where businesses can manage all operations like inventory management, order management, finance, logistics, and several other functions in one place. 

ERP inventory management gives businesses a singular view of all operations that can aid decision making, supply chain management, and enhance overall business performance. 

What Does an ERP Inventory Management System Include?

An ERP inventory management system includes several features. It is designed to amalgamate the operations for one view. Some of the features include – 

  1. Multichannel order fulfillment
  2. Order management
  3. Warehouse management
  4. Stock management 
  5. Payment gateways
  6. Logistics integrations
  7. Business analytics

Benefits of ERP Inventory Management

ERP Inventory Management

Greater Efficiency

With an ERP inventory management system, you can reduce the time for managing operations and automate daily tasks. This means that you can increase production and get more outcomes in less time

Accurate Counting

An ERP inventory management system tracks and reports inventory at shorter intervals. This means that you will have real-time data of excess inventory, shortages, any replenishment is needed, and other inventory metrics. It also updates your inventory based on product transfers, shipping, and receiving. 

Supply Chain Transparency

There are fewer chances for mistakes and mishaps with a centralized inventory management system. Also, all information is communicated equally .since all partners are connected directly. An ERP inventory management system also helps with syncing order and shipping information, allowing for complete supply chain transparency. 

Complete Inventory Analysis

An ERP inventory management system provides data for every inventory stage like the cost of goods sold, shrinkage, turnover rates, etc. This means that you can analyze the critical inventory metrics and improve your efficiency accordingly. 

Better Reporting

With more data at hand and detailed insights, you can dive deep into data and make much more informed decisions. Since ERP inventory management systems consider the entire supply chain, your insights are much more affluent, and you can decide better for your business. 

Does Your Business Need ERP Inventory Management?

Not every business requires an ERP inventory management system. However, having it can be a significant boost.

If you are a business looking to expand and orders are going to increase, an ERP inventory management system can be very beneficial. 

Also, if your business has complex workflows and a complicated supply chain, an ERP inventory management system can help make the entire process more systematic, and you can avoid errors. 

How Can ERP Inventory Management Improve eCommerce Fulfillment?

The eCommerce fulfillment supply chain also consists of inventory management, warehouse management, order receiving, packaging, shipping, and returns management.

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With an ERP inventory management system, you can simplify the entire eCommerce fulfillment supply chain by compiling data in a single place and updating information in real-time. This will help you optimize your warehouse space, efficiently utilize the inventory, synchronize your shipping and returns data, and notify you to replenish your stock. 

Outsource eCommerce Fulfillment With Shiprocket Fulfillment

Even though an ERP inventory management system may seem like a lucrative option, it can be challenging to purchase and maintain. It is an expensive capital investment. 

If you want to expand your eCommerce business and increase your average order volume, you must bring in experts to free your time and bandwidth. 3PL fulfillment providers like Shiprocket Fulfillment can help you do this. 

Even though a centralized inventory management system can help reduce the hassles of your warehouse, decentralizing your inventory is the key to reaching most customers in India.

With Shiprocket Fulfillment at your disposal, you can store inventory in multiple warehouses across India and fulfill orders based on the demand in the region. 

This means that you can store inventory closer to customers and reduce delivery time and shipping costs on each order. 

Not just this, you can also provide a competitive advantage to your customers by giving one-day and two-day delivery options. With the significant number of successful deliveries, you can also reduce your RTOs by 60%. 

Conclusion

An ERP inventory management system is a revolutionary concept to reduce the manual load and increase efficiency for your eCommerce business. However, as it is an expensive and critical investment, make sure that you evaluate all other options before making this call. 

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Jan 25, 2022 by Srishti Arora

4 min read

Vendor Managed Inventory: Advantages & Disadvantages

January 18, 2022 by Rashi Sood - 4 min read

Running a business successfully is a challenging task. To derive growth and success, you need to streamline your day-to-day business operations and reduce costs. Managing inventory is one of the most difficult tasks that most business owners fail at. There are several inventory management models that you can employ to achieve efficiency and reduce cost. One such model is Vendor Managed Inventory.

vendor managed inventory

VMI or vendor managed inventory is a B2B strategy between a business and its vendor where the vendor manages the inventory. This helps the business save up on working capital and reduce its time and money.

This blog will provide you with an insight into vendor managed inventory and its advantages and disadvantages.

Vendor Managed Inventory: An Overview

Vendor managed inventory is when the vendor or supplier manages the inventory level. Most businesses choose this strategy as it helps them manage stock levels better and efficiently. Outsourcing the supply chain task helps the business owner stay focused on other business operations without worrying about managing the right inventory levels.

Benefits of Vendor Managed Inventory

Vendor Managed Inventory

In addition to eliminating roadblocks and helping in managing inventory requirements, vendor managed inventory has several benefits on offer:

Improved Inventory Alignment

In a vendor managed inventory setup, the supplier takes charge of replenishing inventory, allowing you to adjust inventory as per the customer demand automatically. It helps improve supply chain management, even during seasonal changes. Also, you can meet the demand variabilities quickly as the suppliers themselves coordinate with the manufacturers. Overall, you can reduce stock-out situations and other inventory-related efficiencies.

Streamlined Processes

Since you don’t control and manage inventory, you can achieve operational efficiencies. The ordering process is based on accurate data, which can help you save costs. You can also reduce the frequencies of last-minute orders. In fact, you can reduce the overall number of inventory orders and returns.

Improved Data

With your vendor managing inventory, you can get improved insight into operational data. For instance, you get an insight into the products that are selling well and the ones which are not. With this data in hand, the salesmen can improve their performance by developing a better customer relationship. as you get access to more meaningful and insightful data, you can expand your business in more valuable ways.

Better Relationship with Customers

With the help of VMI, you can enhance your relationships with customers and gain a competitive edge – thanks to insightful data, no out-of-stock situations, and on-time delivery. Also, you can quickly recognize the loopholes in your supply chain process and improve them for better efficiency.

Increased Sales & Profits

With a better understanding of what your customers are demanding, you can increase their experience with you, and thus sales and profits. With greater transparency and better communication, you can better meet your customers’ needs.

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Disadvantages of Vendor Managed Inventory

Disadvantages of Vendor Managed Inventory

Before you jump to any conclusion, have a look at some challenges that you might face with vendor managed inventory:

Loss of Inventory Control

This model is not beneficial for you if you want complete control over inventory. Also, if you are unwilling to share internal data with a third-party vendor, this model is not for you. You might also be unaware or not sure of the inventory handling capabilities of your supplier.

Limited Options

Once you partner with a supplier for managing your inventory, it may cause supply chain disruption if you become unsatisfied with their services. You might come across suppliers that offer better products at cost-effective rates. But being in VMI relation with the supplier, you might not be able to change your supplier until the partnership ends.

Market Responsiveness

If you feel you are an expert at the demand fluctuations in the market, the VMI route is not for you. With your supplier going through the data insights and supplying inventory accordingly, he might not be providing accurate data. Thus, you might not get access to the correct sales forecast leading you to plan your business operations on unreliable data.

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Jan 18, 2022 by Rashi Sood

5 min read

Efficient Retail Inventory Management: Retailers Guide for 2022

January 4, 2022 by Rashi Sood - 5 min read

Retail inventory management is the process of managing the inventory (products) that your buyers want. It involves stocking, pricing, promoting, and maintaining inventory at different levels to ensure that you meet your customers’ demand without over or under-stocking inventory. This guide to retail inventory management explains how inventory can be managed – receiving inventory, counting it, and tracking its location in the warehouse.

retail inventory management

Retail Inventory Management: An Overview

Retail inventory management is the practice of ensuring that a business procures the right products and in the right quantities, at the right time. With inventory management, you can ensure that you always meet customers’ demands without running out of stock.

The process also includes knowing when to buy more inventory and how much inventory you already have in store. This helps you know whether you are running low on inventory and when to reorder inventory to ensure you are never out of stock.

If the retail inventory management is done right, you can track your orders accurately. You don’t have to suffer from inventory surplus or shortage. Notably, many businesses suffer financially due to inefficient retail inventory management. It helps lower the business cost as it provides an insight into:

  • Product location in the warehouse
  • Product quantity in hand
  • Products that are selling well
  • Profit margins of each inventory
  • How much and how often do you need to reorder
  • Effects of seasonal changes on product sales

Importance of Retail Inventory Management

retail inventory management

Inventory management helps in increasing efficiency and, thereby, profits. With efficient management, you can capture every sale possible without overstocking or understocking. The following are benefits that you can take if you manage your retail inventory efficiently:

Savings on Inventory Cost

With the information regarding how much stock you have and how much more you need, you can keep your inventory levels in check. Thereby, you can reduce storage and inventory carrying costs. You can also save on logistics, shipping, depreciation, etc.

Minimize Out-of-Stock Situation

To avoid missing sales and disappointing customers, you need to prevent an out-of-stock situation. You can use inventory management tools to determine how much stock you need. With the real-time information on sales and stock, you can quickly order inventory if you are running low on it.

Improves Profit Margins

With lower inventory costs and storage costs, you can save on expenses. Also, when you have enough supply to fulfill all orders, you can cater to all your customers to maximize profits.

Improves Inventory Forecasting

Efficient inventory management also provides you access to historical sales data and seasonal capital needs. With these forecasts, you can plan your budgets in advance and accordingly manage your spendings on product development, marketing, etc.

Improved Customer Satisfaction

When you deliver products to your customers faster and with fewer mistakes, their loyalty increases towards your brand.

Efficient Supply Chain Management

Knowing about the inventory and sales trends, you can manage your supply chain better. You can order inventory just-in-time, whether with fewer or bigger requirements. Besides, you can also minimize inventory costs regarding holding, storing, and ordering inventory.

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Retail Inventory Management Steps

The basic steps in retail inventory management involve identifying your goods and knowing their quantity, location, and other specifications like the expiration date.

Centralized Record of Products

Firstly, you should have a centralized list of all the products that you sell with the following details:

  • Product name, SKU, and brand
  • Product variables, like size, color, etc.
  • Vendor name and SKU
  • Inventory on hand
  • Reorder lead time

You can also keep product images and descriptions to conveniently help your staff identify the products. Also, when you add a new SKU, ensure that you enter and update them in the inventory record. Having centralized data that is accessible by everyone in your team is crucial.

Stock Location

If you run a small business from a single store, your inventory is placed at one place only – either in the display or in your stockroom. But if you sell from multiple sites, you must have your inventory at different places – warehouses, distribution centers, stockrooms, etc.

Misplaced or overlooked inventory will lead to missed sales. Thus, it would be best to keep a tab on where your inventory is and its quantities. You can take the help of inventory management software.

Regular Stock Counts

Count the inventory periodically and match them against sales numbers. Double-check your data and focus on deviations. Also take into account damage, shrinkage, returns, or defects. You can perform inventory counting bi-monthly, quarterly, or half-yearly as per your business’s complexity and scale. Nonetheless, experts generally recommend counting inventory once a quarter.

Combine Inventory & Sales Data

Integrate your sales and inventory data to check which products are turning over fast and which are lagging. This data will help you decide when you should reorder inventory and stock higher units of which SKU. You can also plan your marketing and advertising activities accordingly.

Purchasing Process

Review data and place inventory orders on time to avoid getting caught behind the season’s sales and trends. Ensure that you have buffer inventory when you reorder stock to continue your sales till the new stock arrives. Prioritize your purchases based on the item’s sales, profitability, and popularity among the customers.

Stock Receiving Procedure

Establish a procedure to verify the incoming orders and enter them into your system. An error in transit can lead to problems like overpayment to suppliers or unexpected stock outages without this procedure. Check every delivery against the order and verify the contents as well. Enter the products in the system only after performing all the checks. Look for damages, shortfalls, or mistakes, and follow up with suppliers if there is any problem.

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Jan 4, 2022 by Rashi Sood

5 min read

Store Inventory Management: How Do You Manage Store Inventory?

December 21, 2021 by Pulkit Bhola - 5 min read

Your inventory, as they say, is actually money that’s just sitting around in another form. Since you must manage your money wisely, store inventory management is definitely something you need to be good at.

No matter how many warehouses you’ve got to maintain, you must count each item of stock in each one of them, record the results, and take necessary action accordingly. It seems so challenging, right?

Well, you can’t help but keep track of your inventory levels all the time. After all, an unexpected stock-out is the last thing you’d wish for. Some inventory management software do come to your rescue by making store inventory management less of a headache.

store inventory management

Managing your stock is often like you’re stuck between the devil and the deep blue sea. On one hand, you don’t want to disrupt your cash flow with excess stock. On the other, you want to keep enough stock to timely meet the demand of your customers.

This is where store inventory management comes into the picture. Let’s understand what it is and how you can do it effectively.

What Is Store Inventory Management?

Store inventory management refers to maintaining your stock at the optimum levels across your online stores. In other words, it means keeping track of incoming stock, outgoing stock, and the stock lying in your warehouse.

Managing your inventory effectively helps you not only save big on your costs but also enables you to make timely decisions. You can get a crystal clear idea about when to recover your stock or sell your old stock.

Result? You can enjoy an uninterrupted cash flow and also can fulfill your orders on time. Here are the best practices of store inventory management to help you along the way:

Effective Practices Of Store Inventory Management

Did you know? Mismanaged inventory had cost retailers a whopping US$ 677 million during the coronavirus pandemic last year. To protect your business against such a situation, do the following:

store inventory management

Forecast Accurately

If you fail to forecast, you forecast to fail. Always base your sales projections on crucial factors such as your past sales data, economic environment, marketing plans, and the ongoing market trends.

Utilize The FIFO Approach

FIFO(First In, First Out) approach of store inventory management suggests that your products should be sold in the same chronological order as they were bought or manufactured. This is particularly useful in case of perishable products like food items

However, it’s also a great idea for non-perishable goods as long as there is a risk of damage or becoming unsellable. Here’s a trick. Always add new stock from the back, so the older stock is at the front.

Identify Excess Stock

You see, excess of everything is bad. Get rid of every stock item that hasn’t been sold at all in the last six to twelve months. Maybe, consider running a special discount or promotion for such products to clear that stock.

Do A Stock Audit

No matter how good your store inventory management software is, don’t forget to manually count your inventory from time to time to avoid any surprises. This can be done through various techniques, such as an annual physical inventory count or an ongoing spot audit.

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Deploy An Inventory Management Software

If you aren’t using any store inventory management software, get one today. The most important things you need in an inventory management software is real-time insights and regular inventory alerts via Email or SMS.

Keep Track Of Your Stock Levels

Never ever lose track of your stock levels. You simply can’t do that, unless you want to waste your time and money. While tracking your inventory levels, always prioritize the most expensive products. A good inventory management software can also help you do this easily.

Ensure Proper Quality Control

Last but not least, take a pledge now that you’ll keep your products in tip-top condition and are working properly. To start with, hand over a simple checklist to your stock auditors that covers damage, labeling, and other quality-related aspects. 

That’s it for now. We hope you must have got a clear understanding of what store inventory management is and how you can implement it in your business. But here’s a tip. If you don’t want to take any stress, how about outsourcing your entire order fulfillment process to a third party?

Manage Your Inventory Like A Pro

Using Shiprocket Fulfillment, you can sync your inventory from all your sales channels and marketplaces in a single place. You can also integrate new channels in just a few clicks. 

It’s easier to keep track of your stock and determine how many products you have on your hand. Our system will let you know when you are running out of stock so that you can update your inventory on time.

Simplify your fulfillment, warehousing, and logistics operations today.

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Dec 21, 2021 by Pulkit Bhola

6 min read

Tips to Improve Distribution Channel Management

December 14, 2021 by Rashi Sood - 6 min read

Distribution management has always been a challenge for most businesses. Sometimes, the raw materials can arrive early and go obsolete even before they are put to use. Raw material can also come late, leading to the final products taking a long time to reach the market. Thus, by then, your competitor might have already seized your market share.

distribution channel management

Effective channel distribution management is crucial for inventory and supply chain management. If all processes of distribution channel management are optimized, you can take your business to the next level. While doing this might not seem easy for you, we are here to help you. This blog focuses on how channel partnerships streamline distribution and make your distribution channel management more efficient.

What is Distribution Channel?

Before delving any further into the strategies, first, let us understand the distribution channel.

The means to get products to your consumers is called a distribution channel. The channel involves the participation of independent organizations that help in making a product available for sale and use by the end consumer. While some channels can be short, some can be long, requiring a lot of intermediaries.

There are two types of channel categories, namely direct and indirect. When the manufacturers and the consumers are connected directly, the channel is direct. A direct-to-consumer sales channel includes internet sales and direct mails.

Indirect channels involve intermediaries or the additional companies that help the manufacturer reach the consumer. For instance, a product is manufactured by the manufacturer but sold through distributors and retailers. Thus, distributors and retailers act as intermediaries who help the products reach the consumers. The indirect sales channel is typically used by the companies that operate in traditional brick-and-mortar stores.

The product cost varies for each channel. Since retailers and distributors are also entities selling products and services in the indirect sales channel, the product prices are a bit on the higher side. Alternatively, since there are no distributors and retailers in the direct channel or say the manufacturer himself is the distributor and retailer, the prices tend to be lower.

Importance of Distribution Management

distribution channel management

Channel partnerships streamline distribution and play a crucial role in successfully distributing the products to the consumers. The markets are growing rapidly, and thus, the complexities of product distribution have also increased. Therefore, there is a requirement for distribution channels. The following is the importance of distribution channels:

Salesmanship

Since your customers are in direct contact with your distribution channels, they can play a crucial role as a salesperson. It helps in creating a new product by promoting it in the market. You can also assure pre and post-sales service with the distribution channel. You can also use these channels to get valuable feedback from your customers.

Distributional Efficiency

You can efficiently distribute your inventory with the help of intermediary channels. This is economical, and it narrows down the gap between you and the customers. With the intermediate channels, you can also reduce the number of transactions involved in reaching the products to the end consumers. However, these transactions are eliminated automatically when you sell your products directly to consumers through online channels.

Merchandising

The distribution channels help in merchandising. When your intermediary displays the product on his shop desk, the customer gets attracted by it. He might become curious about the product and switch to it from his regular one. Thus, you can also merchandise your products with distributions channels, which acts as a great medium for product publicity.

Stock Holding

With the intermediaries, you can also hold stock. Thus, the need for renting a space in a warehousing unit is eliminated. However, in direct-to-consumer channels, you deal directly with your customers. You can predetermine the demand for your products effectively. Thus, there is generally no need to hold inventory for a very long time. And in cases where you need to hold inventory, you can partner with third-party logistics partners. They store your inventory in their fulfillment centers and process and ship your orders on your behalf.

Distribution Channel Management Strategies

distribution channel management

Distribution channel management can be tiresome sometimes, even for business veterans. However, we have listed down a few tips and tricks for which can help manage distributions channels efficiently:

Understanding Distribution Channel Strategy

The first step is to understand your current strategy. There are two main distribution channels discussed above – direct and indirect. But there are three other categories as well:

  • Intensive Distribution: this channel is used to sell mass-marketed products. This generally includes everyday items and fast-moving consumer goods. Products like soaps and soft drinks are sold using this channel as they are extensively available in different retail shops. While using this channel, you are able to display your products at more places, making your customers more likely to purchase them.
  • Selective Distribution: selective distribution is the distribution channel where you distribute your products through selective channels only. This is the best channel to distribute premium products.
  • Exclusive Distribution: as the name sounds, you sell products through exclusive distributors only to distinguish them from others. This is an ideal channel option for luxury items. The products might be low in the number of sales but high in their value (price tags). Here, customers value these products so much that they are willing to travel long distances to exclusive distributors only.

All distribution channels have strengths and weaknesses, and each one suits a particular type of product. You need to weigh the strengths and weaknesses of each channel and understand if they are the ideal ones for the products you are selling.

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Streamline Product Movement

Streamlining product movement is crucial for every distribution strategy. Early, late, or incomplete deliveries can hurt your business and its credibility in the market. It can hurt relations with your customers as well. Customers are less likely to buy from you again if they receive incomplete products or late deliveries.

You need to optimize your supply chain and warehousing functions to optimize. They can effectively help in delivering products faster and keeping customers happier.

Review Channel Intermediaries

Working with multiple distribution channels can sometimes be tricky. However, if you use the right mix of channels, they can benefit your business. Thus, review your distribution channels. Though reviewing channel intermediaries is mostly related to indirect distribution, you need to review channels, i.e., the sales and logistics channel for direct to consumer distribution channels as well. For the sales channel, check whether the channel (website, marketplace, etc.) you are using is the ideal one for your products or not. Similarly, review if the logistics and order fulfillment channel you have tied up with is able to give your customers the best experience in terms of timely order delivery.

Distribution channels are not only limited to the movement of products. It involves intermediaries that can either make or break your business. They act as the medium between you and your business. Thus, they need to be well-maintained and improved from time to time to be more effective and beneficial for your business.

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Dec 14, 2021 by Rashi Sood

5 min read

Quantitative & Qualitative Forecasting Techniques For Your Supply Chain

December 7, 2021 by Pulkit Bhola - 5 min read

Did you know? Last year, global eCommerce sales crossed 4.2 trillion US dollars and are expected to rise to 5.4 trillion US dollars by next year.

To stay relevant in a market this big and to cater to the increasing demand, it is important to understand how to properly forecast your supply chain. Keeping your supply chain on-track results in stronger business relationships, better customer experience, and more capital to scale your business.

qualitative and quantitative forecasting methods

However, forecasting your supply accurately based on your historical data can be difficult at times. You, as a result, end up feeling worried and under-prepared for what’s coming your way.

This is why it is crucial to know about the different quantitative and qualitative forecasting techniques & how you can use them to optimize your supply chain.

What Is Supply Chain Forecasting?

Supply chain forecasting refers to the process of predicting everything about your supply chain to ensure smooth running and continued growth. This is done using various data points and research methods.

Supply chain forecasting not just helps in demand forecasting and sales projections, but also makes it easy to determine production lead times, product pricing, labor needs, and others. 

You can forecast your supply chain using two types of methods or techniques: quantitative and qualitative. Let’s understand the qualitative and quantitative forecasting methods in detail:

What Are Quantitative & Qualitative Forecasting Techniques?

Quantitative forecasting methods use past data to determine future outcomes. The formulas used to arrive at a value are entirely based on the assumption that the future will majorly imitate history.

On the other hand, the Qualitative forecasting method is primarily based on fresh data like surveys and interviews, industry benchmarks, and competitive analysis. This technique is useful for newly launched products, or verticals wherein historical data doesn’t exist yet.

Now that you know what qualitative and quantitative forecasting methods are, let’s deep dive further:

Types of qualitative and quantitative forecasting methods

Qualitative Forecasting Techniques

Delphi Technique

In this method, a forecast is made, and then it is validated by experts. The estimates made are discussed in a group until all the members reach a consensus.

For instance, you could forecast the amount of inventory you need to hold to meet your holiday demand in the upcoming winter season. Your forecast could then be analyzed by all department heads in a group discussion until everyone is on the same page.

Market Research

Market research is one of the best methods of supply chain forecasting. Through market surveys, competitive analysis, and expert interviews, you can predict supply and demand, which is in line with your profit goals.

It can be implemented either internally by marketing experts or by a third party specializing in this field.

Panel Consensus

In this method, members from all levels of a business come together to make a forecast. It enables all the participants to express their opinions based on their knowledge and experience openly.

For example, you could work with your customer support team to identify which products are being given negative feedback and why. Similarly, you could ask your sales team to tell you your best-selling products.

Historical Analysis

This kind of forecasting is used to forecast sales on a presumption that a new product will have a similar sales pattern to that of an existing product. This can be either being sold by you or your close competitor.

Historical analysis might not be that accurate in the short term, but it can prove to be helpful in the medium as well as the long term.

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Quantitative Forecasting Methods

Moving Average

Moving average is a statistical method in which the normal average is considered as the basic calculation for forecasting seasonal demand. To make your average move over time, you need to remove the oldest values from the data and add new values.

For instance, you could use your week-by-week revenue data to forecast revenue for the coming week using the moving average method.

Regression Analysis

Regression analysis is done by knowing the relationship between two or more variables. The idea is to measure the influence of one or more independent variables on a dependent variable.

This is a relatively faster and easier method to establish forecasts based on existing assumptions, like seasonality.

Exponential Smoothing

This method considers past data but gives more importance to recent observations. It allows you to make essentially data-driven forecasts without the need to examine multiple sets of data.

If you have the right tools, the exponential smoothing method can prove to be really effective for short-term forecasting.

Adaptive Smoothing

The adaptive smoothing method uses multiple variables to make a forecast. It helps you to dive deeper into changes over a period of time and pinpoint particular patterns.  

By using this method, you can concentrate on specific variables and make wiser decisions.

That’s all. By now, you must have a clear understanding of all the qualitative and quantitative forecasting methods. But which one is the best?

The Best Of All Qualitative & Quantitative Forecasting Methods

While there is no one best method of supply chain forecasting, it is important to note that short-term forecasts are generally more accurate than long-term forecasts. 

In fact, it is also true that all of these qualitative and quantitative forecasting methods have some or other errors due to the underlying assumptions.

In a nutshell, the type of method you should use depends on your objectives. As the qualitative methods rely on subjective opinions, we suggest that you consider the quantitative methods to be a bit more reliable.

Strengthen Your Supply Chain

By outsourcing your eCommerce warehousing and fulfillment operations to Shiprocket Fulfillment, you can store your inventory closer to your customers in a PAN India network of fulfillment centers. 

As a result, you can deliver your orders three times faster and easily manage a surge in demand. Strengthen your supply chain with efficient logistics. Get in touch with our fulfillment experts today.

Shiprocket Fulfillment features
Dec 7, 2021 by Pulkit Bhola

6 min read

How Multichannel Distribution Can Help Expand Your Business

December 2, 2021 by Rashi Sood - 6 min read

Today, running a business is not limited to just selling on a single channel or platform. You can sell your products across multiple channels to reach more customers and increase sales. You can run a physical store, online store, or sell through both platforms. You can also consider selling on major online marketplaces like Amazon and Flipkart.

Multichannel Distribution Strategies

If appropriately managed, a multichannel distribution system can help expand your business by increasing customer reach. But without the right tools, resources, and technology, it might be hard for you to establish a multi-channel distribution system.

This blog will discuss what a multichannel distribution system is, its benefits, and its strategies.

What is a Multi-Channel Distribution System?

Nowadays, consumers want to shop from different places at their convenience. A multichannel distribution system is where a businessman sets up two or more sales and marketing channels. He does so to increase his customer reach and increase profits. He can sell through a brick-and-mortar store, online store, and online marketplaces.

A multichannel distribution system is majorly run with the support of technology. However, planning a multichannel strategy is also equally important and must be executed properly.

Benefits of Multichannel Distribution

Multichannel Distribution Strategies

Here are the benefits of adopting a multichannel distribution system:

Increased Customer Reach

This is the obvious benefit of a multichannel distribution strategy. Adopting the strategy helps reach a broader customer base and sell in more markets. You can blend physical store, eCommerce, and sales and marketing functionality to grow and increase sales. Reaching a broader range of customers simply means expanding your business into previously untapped markets.

Distributors will also benefit from a multichannel distribution system by reaching new customers from a broader geographical reach. They can take explore new opportunities and take advantage by selling through pop-up stores and online marketplaces.

Improved Customer Interactions

With the advent of technology, customers are now demanding more. Better and pleasant customer experience has also become significant. Multichannel presence is in demand, and all business owners are adopting it to offer maximum customer satisfaction to their customers to differentiate themselves from competitors.

Whether your customers are end-consumers or retailers, embracing a multichannel distribution strategy offers flexibility to your customers and enables them to purchase products at their convenience. This is bound to give you an edge over competitors.

Optimized Supply Chain

The supply chain is the backbone of the distribution business. To remain competitive and profitable, all businesses should optimize their supply chain process, which can happen with the help of a flexible multichannel distribution process. With a multichannel distribution process, you can ensure that the supply chain process is optimized.

Reduced Risk

Sometimes, relying on a single distribution channel can be risky. If it didn’t turn out the way you wanted, you could be in trouble. However, by selling on multiple channels, you can reach different people and reduce the risks significantly. It will help diversify your distribution network. However, it might be a little challenging to manage and track multiple sales channels in real-time.

Increased Revenue

Adopting a multichannel distribution strategy will ultimately lead to profits. Serving new customers through multiple channels brings in more sales, and thus revenue. Upon serving a broader customer base and penetrating new markets, your revenue is bound to increase. With this strategy, you boost your productivity and increase efficiency with the help of automation and a streamlined process.

Multichannel Distribution Strategies

Multichannel Distribution Strategies

Adopting a multichannel distribution strategy involves a lot of strategizing before executing it. However, once executed, it can be extremely beneficial for your business. Have a look at some of the strategies that you can start with:

Choose The Right Sales Channel

From physical stores to social media platforms, you can sell your products anywhere. But that doesn’t mean every platform is the right sales channel for you. Have you seen a car company selling cars on any of the social media platforms?

Before choosing any platform, you need to be sure that the platform you are about to sell on will provide you with the right opportunity and customers. Specifically, it won’t kill your margins or have any fees that might lead to fewer profit margins.

So, before committing to a sales channel, you need to consider if your target audience is present on the channel. Next, think about whether the channel matches the type of product you sell. For instance, social media channels like Facebook or Instagram are not the right option for selling cars. They indeed can be used to advertise to the target audience, but you surely can’t sell vehicles through these channels.

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Amazon offers all types of daily products at different prices. Most buyers tend to go to amazon to buy everyday essentials. However, buyers don’t have a look at the brand before buying daily products. Similarly, for beauty, health, and wellness products, most buyers go to Instagram and Pinterest. These platforms provide good visuals of the products and let the buyers interact during the purchasing process. You can present your products in the best light and with eye-catching visuals.

Centralized Data

When you sell through multiple platforms, it is crucial to have a single source of data. Always having data at your fingertips will help you make informed decisions such as inventory management for your business’s benefit.

Tracking inventory can be challenging, especially when you fulfill orders across different channels. That is why a centralized data system will make it easier to track inventory and refill it when required. You can also leverage technology to streamline the process and make it efficient.

3PL Service Provider

You can integrate your multiple sales channels with the 3PL service provider platform. With this, all your orders are automatically fetched and synced, and you can check all your orders from multiple platforms at a single platform. Not just this, you can also process and ship your orders from the platform only. Besides, the 3PL platforms also help in managing orders and inventory.

If you are looking for one such 3PL service provider, Shiprocket Fulfillment is your best option. With us, you can store your inventory in tech-enabled fulfillment centers across all major locations in India and fulfill orders 3X faster. Not just this, you can ship your orders to 29,000+ pin codes and 220+ countries at the lowest shipping rates and reduce RTO as well.

Conclusion

Diversifying and selling through multiple channels is vital in today’s competitive environment. With the help of multichannel selling, all business sizes can be benefitted by catering to new customers, markets, and geographic regions. It is an organic and cost-effective way to increase sales and profits.

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Dec 2, 2021 by Rashi Sood