As I’m sure you are aware, many retailers and e-tailers require their suppliers to provide SKU inventory quantities on a regularly scheduled basis to ensure that they can fulfill the orders received or be able to determine that an item is out of stock.  It sounds simple enough, but there are some pretty major repercussions (i.e. scorecard dings and chargebacks) if you get it wrong.  

A huge problem that occurs frequently is overselling.  An example of this might be:  If you have ten (10) of an SKU in stock and report all ten (10) to three (3) retailers, you are indicating that you have thirty (30) of this SKU in stock.  If all of these retailers sell ten (10) of this SKU you’ve oversold and have to cancel orders for twenty (20) of them.  This results in scorecard problems and charge backs by the retailer. 

It’s a very real business problem for suppliers that work with multiple retailers and can cause unexpected financial problems.  To understand this problem, you need to ask the following questions regarding your business processes: 

  • SKU Inventory Accuracy – Is your inventory properly maintained, frequently updated and being decremented as orders are filled?  
  • Inventory Reporting to Multiple Retail Channels – Do you report all of your inventory quantity to each retailer?  Is it simple to allocate your inventory across retailers? 
  • Low Inventory Levels – Are you aware if a SKU’s inventory is dangerously low and cannot handle a large order? 
  • Frequency of Inventory Feeds – Are you sending inventory feeds to retailers as often as needed to keep them up to date?  Are you meeting their frequency compliance requirements? 
  • EDI Inventory Feeds – Are you sending inventory feeds using EDI?  Can your EDI provider provide the speed needed? 

If you’re managing these things either manually or semi-automatically using software systems that require manual input, it’s just going to be an uphill battle to eliminate the problem.  Your retailer, order processing, inventory tracking and invoicing all must be connected in a way that eliminates manual effort and expedites timely, accurate communication of information.  

If your current processes and investment in technology systems are unable to do this for you, then please visit OPAL.