Stock availability stands as a pivotal factor determining the efficiency and profitability of businesses. In the wholesale sector optimum availability is a shared responsibility between the supplier and the wholesaler.
We all enjoy a good conference, writes David Gilroy at Store Excel. Here’s the thing, as a speaker there is a fine line between offering insights and giving away commercially sensitive information. This is the dilemma facing wholesaler speakers invited to speak at industry events. There are several different options available to presenters. Use the presentation to promote their own business and big it up – never goes down well. Throw up a range of indecipherable spreadsheets onto the screen and bamboozle the audience with statistics – hits a wall of indifference. Take the quasi-academic approach giving out some useful information already in the public domain and package it intelligently – muted approval. Or follow the Booker Wholesale line and construct the entire speech around price, service & choice – inward groans among the audience and much chuntering in the bar afterwards. But not by me. Booker was a basket case in 2005 when Charles Wilson took over as Chief Executive. He knew he had to get the company back to doing what it did best and to restore the fundamentals of good business practice. He introduced the price, service, choice mantra to focus the entire team on the job in hand. He reinforced the message through constant iteration. He set up a system of continual customer research around the three “pillars” to measure business performance and act as appropriate. His view was that if the customer research was going in the right direction, the numbers would follow. He was proved right.
If I had to pick one out of the three: price, service, and choice, it would be choice or availability. Why? You can’t sell what you don’t have. And making sure that products are reliably stocked is first base for customer service. I was recently reminded of this on a visit to a large electrical store. I don’t wish to name names, rhymes with flurries. I wanted to purchase a big screen television. I’d done my online research but decided I needed to touch and feel the product and maybe get some expertise in store. After much deliberation I whittled my choice down to three. The first two were out of stock with no prospect of availability for seven days.
I selected my third choice and opted for home delivery. I navigated the sniper’s alley of the tortuous payment process punctuated with its upsells to be told that they don’t deliver to my area. Although I only live twenty minutes from the store, there was no negotiation on this. However, they could possibly do a work around for me. I don’t know about you, but any talk of a “work around” in any context brings me out in a rash. I walked out and ordered a superb TV from “AO let’s go”. The set was delivered and installed the next day. Poor availability and restricted choice are the silent killers, and they are corrosive. AO will now be my first choice for electricals. I have become an advocate, telling family and friends what a great service experience I had. And now here I am sharing this with you.
The challenges of stock availability are multifaceted. One primary issue is demand-forecasting accuracy. Inaccurate forecasts can lead to understocking and overstocking both of which have detrimental effects on operations. Additionally, inventory management complexities pose significant hurdles to maintaining optimal stock availability. Businesses must contend with an array of SKUs each with their unique demand patterns and lifecycles. Balancing inventory levels of fast-moving items with slower moving ones requires sophisticated inventory management techniques. This in turn leads to the effectiveness and adoption of advanced technology solutions. The integration of sophisticated inventory management systems, demand-forecasting algorithms, and real-time tracking technologies enable wholesalers to gain better visibility into their supply chains, anticipate demand fluctuations, and proactively manage stock levels. And it is interesting to note that wholesalers and retailers are beginning to experiment with camera systems to monitor and drive restocking processes in store. Moreover, the adoption of lean principles and just-in-time (JIT) inventory management practices can help wholesalers optimise stock availability while minimising inventory holding costs. By streamlining operations, reducing lead times, and eliminating waste, wholesalers can enhance agility and responsiveness in their supply chains. However, it is essential to strike a balance between lean practices and the need for buffer inventory to mitigate supply chain risks.
Suply chain disruptions, such as natural disasters, geopolitical tensions, crop failures or pandemics, can severely impact stock availability. The COVID-19 pandemic, for example, disrupted global supply chains, leading to shortages of essential goods and exacerbating stock availability challenges for wholesalers worldwide. Case studies such as those conducted by the World Economic Forum (2020), underscore the need for resilience and flexibility in supply chain management to mitigate such disruptions. And the fall out carried on well beyond the peak of the pandemic with the massive cost increases of sea containers, the impact of labour shortages and the triggering of food and drink inflation.
Effective stock management relies on collaboration and partnerships across the supply chain. Collaborative planning, forecasting, and replenishment (CPFR) initiatives foster closer relationships between wholesalers, suppliers, and business customers, facilitating information sharing and coordinated inventory management efforts. The introduction of AI stock management technology will bring all of this into sharper focus and hopefully take it to a higher level. The shared objectives of optimising stock availability sit right at the heart of excellence in customer service and business performance.
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