5 min read

Understanding The Concept of Production Forecasting

July 28, 2022 by Srishti Arora - 5 min read

When running a direct-to-consumer eCommerce business, you must pay attention to every minute detail of your business. From the start of production up till the final delivery, every process must be in sync to avoid delays and errors in processing. The products you produce and the amount you sell must be well in tandem, so you don’t spend more on storage or in a situation where you run out of inventory while the product is still listed on the website. That is why it is essential to forecast demand and production to maintain a decent stock-to-sales ratio at the end of your sales cycle. Demand forecasting and production forecasting are both vital for conducting your business thoroughly. Let’s look at production forecasting and how you can run it for maximum yield. 

What is Production Forecasting?

Production forecasting estimates the future demand for the product to sell and the resources required to manufacture these products. 

It is a technique that helps you maintain optimal inventory levels to keep the overall profitability high and boost customer satisfaction. 

Production forecasting gives you an estimate of the future demand through which you can order your raw material, resources, etc., in advance to avoid the situations of under or overstocking

Importance of Production Forecasting

Production forecasting is essential for your supply chain because it helps improve efficiency at every stage. Also, it helps prevent situations that lead to lesser sales and reduced profitability. Furthermore, it allows you to get a consistent cash flow and offer your customers compatible products. 

Types of Production Forecasting

There are three main types of production forecasting. These include qualitative forecasting, time series analysis, and causal modeling. Let’s have a look at what they are – 

Qualitative forecasting

Qualitative forecasting is done when you do not have many historical data. This can be suitable when launching a new product or brand.

In this type of forecasting, the production managers need to consider the best judgment. Also, they can take inputs from qualitative data from the customers and in-house sales teams. This data can be obtained via surveys, polls, and similar research methods.

By serving your customers, you can understand their satisfaction, brand connections, etc. Doing your sales teams can provide you with an understanding of how well a new product will sell. You can utilize these two insights to create a production forecast to meet demand. It is entirely subjective based on opinions and judgments. 

Time series analysis

The time series analysis lets you make forecasts based on time-stamped data. This means regularly collecting data at specific intervals can help you deduct a time series analysis to forecast future demand.

Once you have this data, you can analyze it to understand why there were bumps in the inventory outcomes in different periods. 

In the time series analysis, you need a large set of data points; otherwise, it will not give you an accurate forecast, or it will not account for variables.

Causal modeling

Causal modeling is a type of production forecasting where brands forecast future events in a retail marketplace.

The production is done keeping the variables that influence the product movement and market. These variables include inventory availability and consumer preferences.

So casual modeling takes into account the position of your brand or product compared to competitors, and from there, it identifies variables that can influence the future of the product in the market. This includes factors like buyer behavior, the flow of the supply chain, availability of products and materials, etc. 

Shiprocket Fulfillment

The Top Forecasting Methods

There is not one production forecasting that works for all retailers; there are several forecasting methods that a brand can choose depending on its needs, product types, data availability, etc. 

Therefore, it is essential to determine your needs and choose your forecasting method. You are a few standard forecasting methods that brands use – 

The Regression Model Method

In the regression model method, you examine independent and dependent variables that affect your sales performance. 

These independent and dependent variables include sales performance, marketing strategies, campaigns, marketplaces where you sell, etc.

You can gain an insight into what the future might look like depending on the previous sales and production performance. 

To carry out a regression model method forecasting, you will need several years of sales history to obtain meaningful trends. 

The Trend Projection Method

The trend projection forecasting method is straightforward as it considers past sales data and helps predict future production. 

Direct-to-consumer brands use it to get intermediate or long-term forecasts for popular inventory items. 

The trend projection method requires a few years of annual sales data to get the most accurate results. 

The Historical Analogy Method

The analogy method considers a quantitative approach to forecasting in which the past sales of a similar product are used to predict the sales of a new SKU. It is a comparative analysis done during the introduction of identical inventory items.

Final Thoughts

Production forecasting is essential for your e-commerce fulfillment supply chain as it helps you optimize your sales and sync them with demand. It can help you be prepared for different outcomes and give you an edge over the competition regarding sales.

Shiprocket Fulfillment
Jul 28, 2022 by Srishti Arora

1 min read

[Infographic] Demand Forecasting In Supply Chain

July 26, 2022 by Srishti Arora - 1 min read

To ensure your eCommerce supply chain runs smoothly, you must ensure that all operations work efficiently. This means you must be on top of your inventory management to stock items regularly to ensure you never run out and face difficult situations. But, how can you know how much stock to order without knowing your sales? This is where the concept of demand forecasting comes into the picture.

Demand forecasting refers to understanding the customer demand in the future and how it will affect your supply chain. For example, if you had a great sale last month and understand that particular SKUs are working great for your business, you can estimate the demand shortly. Demand forecasting helps you analyze future demand based on historical sales data and current market trends so you can mold your business accordingly. Demand forecasting is an upcoming phenomenon that companies are deploying to enhance and optimize their supply chain. Let’s look at demand forecasting, the techniques to carry it out, and how it can help grow your business.

Shiprocket Fulfillment
Jul 26, 2022 by Srishti Arora

5 min read

The Correct Way For Calculating Stock to Sales Ratio

July 19, 2022 by Srishti Arora - 5 min read

The eCommerce market today is constantly evolving. This means that the stock purchase for one month might either be sold too early, or some of it might be left for you to carry forward in the next month. However, if it is sold entirely by the end of the month, it is a win-win situation for you. This is the stock-to-sales ratio, and eCommerce sellers worldwide aim to achieve a perfect stock-to-sales ratio for their eCommerce sales.

The stock-to-sales ratio is a vital inventory management matrix that helps you optimize your supply chain operations and gives you an idea about how much you need to stock up so that you don’t have a very high expenditure on holding costs or you don’t run into embarrassing situations like stockouts. 

Let’s look at what stock to sales ratio is and how you can calculate it in the correct format. 

What is Stock to Sales Ratio?

The stock to sales ratio, also known as an inventory to sales ratio, calculates the value of your inventory concerning the sales value in a particular period. 

It is an essential inventory management KPI that helps you understand how soon your stock is selling and how much money you have invested in your inventory on average. 

A low ratio is better when discussing the inventory to sales ratio or stock to sales ratio. 

Importance of Stock to Sales Ratio

Inventory management is a critical but diligent operation. As an eCommerce seller, you don’t want much of your capital to be spent on purchasing and holding inventory. However, you also don’t want situations where you do not have enough inventory or a stockout. This constant need to balance out a dead stock and stock out the situation and maintain a positive stock level demands you to increase KPIs that can help you determine the right action for your business. 

When you track your stock-to-sales ratio regularly, you can gain insights into your stock levels and sales and decide on the right approach towards selling, purchasing new stock, and determining trends that can help you make the right decisions.

Calculating the stock-to-sales ratio and tracking it regularly can also help you with demand forecasting as it gives you an idea about how your sales are doing concerning the inventory you purchase.

The Formula for Calculating Stock to Sales Ratio

Stock to sales ratio is calculated as – 

Stock to sales ratio = Average stock value / Net sales value

Average stock value

To calculate your average stock value, you can add the beginning inventory value with the ending inventory value and divide the sum by two. 

Average stock value = (Beginning inventory + Ending inventory) / 2

Net sales

is calculated by subtracting the gross sales from the total returned sales. 

Net sales = Gross sales – Sales returns. 

Let’s understand this formula with an example – 

Let’s assume that you sell Tote bags. The bags are Rs.500, and you sell them for Rs.1000. When you start sales at the beginning of October, you purchase 1000 pieces as your inventory, and by the end of October, you have only 100 pieces left. Out of the 900 sales, 50 were returned.

With this, we can calculate the average stock value as we have the beginning and ending inventory. 

Average Stock Value = ([500*1000]+[100*500]) / 2

Average Stock Value = (5,00,000 + 50,000)/2

Average Stock Value = 2,75,000

Next, we need to calculate the net sales 

Net Sales = [(900*1000) – (50*1000)]

Net Sales = 9,00,000 – 50,000

Net Sales = 8,50,000

Stock to Sales Ratio = Average stock value / Net sales value

Stock to Sales Ratio = 2,75,000/8,50,000

Stock to Sales Ratio = 0.3235 or 32.35%

Comparing Stock to Sales Ratio and Inventory Turnover Ratio

By the name of it, stock to sales ratio and inventory turnover ratio may seem like the same thing. More often than not, sellers tend to use them interchangeably. However, they have slightly different meanings.

Let’s have a look at the few differences between the two metrics

Stock to Sales RatioInventory Turnover Ratio
Talks about the value/price of the inventory soldTalks about the units /quantity of the goods sold
Compares the value of inventory wrt to the cost of the goods soldCompares the number of units sold to the units bought
Deals with the capital involved in moving inventoryDeals with the goods and quantity involved with moving inventory

How Can Shiprocket Fulfillment Help?

When you self-manage order fulfillment operations, managing inventory becomes a critical aspect of it. You need always to be aware of the units that have moved, how many are remaining, and how much you need to re-order. When you outsource these operations to a 3PL fulfillment provider like Shiprocket Fulfillment, we manage all the critical aspects of your order fulfillment supply chain.

Shiprocket Fulfillment has more than 35 WMS-enabled fulfillment centers across India. This means that all you need to do is send your inventory to offer payment centers, and we will handle operations like inventory management, warehouse management, order shipping, returns, etc. You can store inventory closer to customers and reduce the transit time considerably. This does not only help you maintain a suitable stock-to-sales ratio, but it also puts you out of the situation of managing it actively. 

Final Thoughts

The stock to sales ratio is a vital inventory management KPI that you must track for your eCommerce business. It helps you determine how much cost you are putting into your inventory concerning the amount you are selling. Keep an eye out for it to ensure that your capital is in place and you are not overspending or underspending. 

Jul 19, 2022 by Srishti Arora

6 min read

How to Conduct Inventory Replenishment Successfully?

July 7, 2022 by Srishti Arora - 6 min read

Inventory management is one of the most critical aspects of your eCommerce fulfillment supply chain. You need to ensure that this process is carried out seamlessly, so you do not face hiccups during shipping, packaging, order fulfillment, etc. Since your inventory is the main product that will be shipped, you need to ensure that it is in stock at all times in the correct quantity so that the customers don’t have to face an unpleasant shopping experience on your website. To ensure that you have adequate inventory at all times, you need to replenish it constantly. This is where the concept of inventory replenishment comes into the picture. You must pay dedicated attention to restocking your items at the right time. This will help you speed up your order fulfillment process but also help you maintain synchronization between the different order fulfillment operations

Understanding Inventory replenishment

Let’s look at inventory replenishment, its significance, the method utilized for calculating the right inventory replenishment time and quantity, and the best practices to carry out this essential process. 

What is Inventory Replenishment?

Inventory replenishment or stock replenishment is receiving fresh eCommerce inventory from a supplier or manufacturer into the warehouse or fulfillment center.

It also means moving inventory items from the storage space to the picking shelf. 

Significance of Inventory Replenishment

Efficient inventory replenishment forms the core of your inventory management operations. If this process is not in order, you will face unpleasant situations like stockouts, dead stock accumulation, etc. Let’s look at the significance of inventory replenishment in your entire logistic supply chain. 

Prevent Deadstock Accumulation

A major significance of inventory replenishment is preventing any dead stock accumulation. Deadstock refers to inventory that is not being sold but only stored in your warehouse. If you do not carry out inventory replenishment intelligently, there are chances that you will over-purchase items that are not selling and stock them in your warehouse. You will waste a lot of space and resources procuring these items. Eventually, you will need to sell these in a yard sale or with additional heavy discounts on your website. Chances are, some of these items might not even be fit for use by the time you realize they’re not moving. 

Avoid Stockouts

The next advantage of inventory replenishment is avoiding stockouts. Stockouts refer to a situation where the product is listed on your website, and customers have ordered it, but you are out of stock in your warehouse. This is a highly embarrassing situation for you as you need to place a fresh order, which will take more time. This will eventually affect the shipping deadlines, and the customer will receive the orders late. This could ruin the whole shopping experience for the customer, and they might not come to your website again. 

Decrease Shipping Costs

Inventory replenishment might not directly influence the shipping cost, but it does so indirectly. For example, you have multiple warehouses. Your customer ordered a product that was out of stock at your primary warehouse. To ensure that the item is delivered on time, you would split the shipment and send one thing from your primary warehouse and one from the secondary warehouse. This way, your shipping cost would eventually be higher. However, if you replenish the stock for that particular SKU on time, you can avoid the hassle of splitting the shipment because of unavailability.

Shiprocket Fulfillment

Methods For Inventory Replenishment

Reorder Point Method

The first method of inventory replenishment is the reorder point method. The reorder point formula helps you calculate adequate stock levels to meet customer demand. This lets you know the reorder quantity you need and when you should re-order it based on historical data.

It gives you a financial upper hand by keeping a minimum stock at all times. However, you need to calculate the reorder point of every SKU separately.

Periodic Inventory Replenishment Method

The following method is the systematic inventory replenishment method. Under this method, the inventory is re-stopped at set intervals. In this, the inventory levels are looked at specific dates and times without worrying about how low the stock levels may be before that particular date or time. 

Top-Off Method

Finally, the third method is the top-off method. Under this method, inventory of a particular product is topped off in the respective warehouse when there is a slower period or downtime. It is the most suitable for fast-moving SKUs

Best Practices For Inventory Replenishment

Best Practices for Inventory replenishment

Create Thorough Strategies

To carry out inventory replenishment, you first must create strategies for your operations. Define an inventory management process to decide when to reorder inventory. Conduct inventory audits and procedures, and follow warehousing best practices. Monitor your inventory holding costs, shrinkage, and appreciation costs so you know there are no significant cuts into your profit margins. 

Utilize Data

The next best practice is to utilize replenishment data that is available to you. If you have access to real-time inventory management data, you can understand which SKUs are working the best for you, the inventory that is fast-moving, slow-moving, etc. This way, you can carry out proper demand forecasting, calculate the safety stock quantity, find the inventory turnover rate, and make decisions that can impact your business financially. 

Leverage Technology

Finally, utilize proper inventory management software to get more visibility about your inventory levels and make effective decisions regarding your inventory replenishment. This can help you enhance your supply chain by many folds. 

How Is a 3PL Fulfillment Provider Useful?

3PL fulfillment providers like Shiprocket Fulfillment can help you manage inventory without investing in inventory management infrastructure.

Shiprocket Fulfillment has more than 35 WMS-enabled warehouses in multiple cities across India. This means that you can rely on us to take care of managing your inventory, reveal the correct data, and tell you when more stock is needed. This way, you can reorder inventory at the right time without dealing with the hassles of tracking, auditing, etc.

Not just this, you can store inventory closer to customers and ship 3X faster. You can also reduce fulfillment costs, decrease discrepancies, and offer same-day and next-day shipping. 

Final Thoughts

Inventory replenishment is one of the most critical aspects of your inventory management operations. Keep a close eye on your inventory to ensure that you do not overstock or understock at any time. 

Shiprocket Fulfillment
Jul 7, 2022 by Srishti Arora

4 min read

Understanding The Concept of Inventory Discrepancies in Warehouse Management

April 12, 2022 by Rashi Sood - 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 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.

Inaccurate Returns Management

Inaccurate returns management is also a reason for inventory discrepancies as returned 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. 

Apr 12, 2022 by Rashi Sood

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 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 customers’ doorstep.


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 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 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.


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.

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.

Shiprocket Fulfillment

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.

Shiprocket Fulfillment
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.

SR Fullfilment

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%. 


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. 

Shiprocket Fulfillment features
Jan 25, 2022 by Srishti Arora

5 min read

Vendor Managed Inventory: Advantages & Disadvantages

January 18, 2022 by Rashi Sood - 5 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.

Who Uses Vendor Managed Inventory?

Vendor-managed inventory is primarily utilized by consumer-packaged goods industries and electrical industries. It is used by marketplaces like Amazon, Walmart, Flipkart, etc., to deal with 1 million SKUs and works with several third-party sellers. It works best for the retailers with a lot of space to store the inventory but who do not have the resources to manage multiple different SKUs. 

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.

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.

How Can 3PL Fulfillment Providers Help?

Vendor managed inventory is outsourcing your inventory management operations to your supplier. Another robust option is outsourcing their entire fulfillment operation to 3PL fulfillment providers like Shiprocket Fulfillment. 

Shiprocket Fulfillment has more than 35 WMS-enabled fulfillment centers located across the country. In these fulfillment centers, skilled executives take care of all operations like inventory management, order fulfillment, picking, packaging, shipping, and returns. So instead of just outsourcing one aspect of your supply chain, you get to outsource the entire process and have complete control over the inventory, data, and decision-making. 

With more than 35 fulfillment centers, you can decentralize your inventory and store it closer to your buyers. This way, you can save on merchandise, and fulfillment costs, deliver 3X faster and offer same-day and next-day delivery, and improve the delivery rate for your orders.

Jan 18, 2022 by Rashi Sood

7 min read

Efficient Retail Inventory Management: Retailers Guide for 2023

January 4, 2022 by Rashi Sood - 7 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

What is Retail Inventory Management?

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 Inventory Management in Retail

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.

Provide Same/Next Day Delivery

Top Inventory Management Methods For Retailers

Now that you have an understanding of inventory management and the pivotal contribution it can have on your business, you must also know about various inventory management methods for retailers.

Inventory management is beyond storing goods in the warehouse and being accountable for them. It is a strategic process that businesses need to take in order to optimize their supply chain and maximize profits.

Here are the top 3 inventory management methods-

1. First-in, First-out (FIFO)

The FIFO inventory management method is a process where the retailer fulfills an order that arrived first or has been on the shelf for the longest period of time. 

This method of inventory management is ideal for perishable products or seasonal goods that need to be sold within a certain period of time.

FIFO is also considered to be a more profitable method of inventory management since older inventory will be much cheaper compared to new ones.

2. Last-in, First-out (LIFO)

Under LIFO, the retailer fulfills the most recently acquired inventory. In this case, the most recently purchased products are taken as the cost of goods sold, and the goods purchased at a lower cost are shown as inventory.

Unlike FIFO, LIFO is not a straightforward method of inventory management and, therefore, not very commonly used. This method of inventory management is only used in the U.S.

3. Just-in-Time (JIT)

Just-in-time is a method of inventory management in which goods are received and fulfilled on an immediate basis. This is an efficient inventory management method since it reduces inventory wastage, but it requires careful planning of the entire supply chain process.

Another advantage of the Just-in-time inventory management method is that it gives a manufacturer more control over his costs and production. A manufacturer can scale up his production in times of high demand and scale down in times of low demand.

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.

Scale Your Business The Smart Way
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.

Shiprocket Fulfillment

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.

Shiprocket Fulfillment
Dec 21, 2021 by Pulkit Bhola