Working in building materials means working with:
• Thousands of SKUs across multiple locations
• Large orders of fast and slow moving items together
• Long lead times from multiple suppliers, and more…
Slimstock helps building materials companies succeed every day with our best in class forecasting and supply planning software. Slimstock works with every ERP and typically realizes ROI in 6 months or less by lowering inventory and reducing stockouts. Download our helpful overview “Building Materials and Slimstock - Blueprint for Success” to see how we will build success with you!
During this time, it becomes clear how robust your inventory management
Whether the demand is steady or markets across the globe are disrupted, the oldest rule in forecasting remains true - every prediction is wrong! Even the most experienced supply chain professionals struggle with confidently predicting future demand. If this happens often enough, you end up with the opposite of the desired outcome. Namely, you get the wrong stock in the wrong place, at the wrong time.
But what exactly is needed for better predictions? Because every prediction is wrong, many people are happy to start with a “gut feeling” and go from there. However, with so much data available to interpret, we’re going to reject guesses and gut feelings. Instead, the first step for more accurate forecasts is to get informed. The second step is to implement a forecasting strategy that is flexible and minimizes the impact of false predictions.
Steven Pauly, our senior consultant and research scientist, explains how to Increase Forecast Confidence During Unprecedented Times.
8 tips for success in Building and Industrial Supply
The building materials sector is heavily affected by COVID-19-crisis. On one hand, large construction projects are allowed to continue work while future construction projects will most likely be delayed. Smaller contractors working on home replacements and renewal will face a large drop in customer demand and are limited to emergency repair, while at the same time DIY is going through the roof due to the additional time customers spend at home.
From a forecast and inventory perspective, it is key that you model this demand separately and that you can create insight into the changes in demand by the business stream. Do you need help with this? At Slimstock we have over 25 years of experience ensuring you have the right stock, at the right time, in the right place.
Download our following whitepaper which will give insight into the problems we solve on a daily basis:
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Many supply chain experts stress that we will be facing a large bullwhip effect as a result of the COVID-19 crisis. For non-supply chain people: the bullwhip effect is a phenomenon where small changes in demand at the end-consumer level lead to (unreasonably) large orders and inventory levels at the manufacturer.
There are a few explanations as to why this is happening; the main contributors to the bullwhip effect are due to lack of information sharing in the supply chain, long lead-times from manufacturer to retailer and the need for each node in a supply chain to keep its inventory and buffer stock. The human component of overreacting to issues (“in trouble, we double”) is also one of the biggest reasons the bullwhip effect exists. Despite it being a well-researched phenomenon, in practice, the bullwhip effect is still very common.
In this knowledge paper, supply chain expert Paul Durlinger reconstructs the concept based on an example (toilet paper). How the pendulum effect could manifest itself and how it will probably continue to work in the chain in the coming months. What are the lessons for the future?
DOWNLOAD OUR GUIDE TO MITIGATE THE BULLWHIP EFFECT!
The COVID-19 outbreak is causing supply chain disruption around the world, affecting labours, movement of goods and production. Many companies are struggling to keep up with the unpredictable change in demand patterns.
We are aware these are unprecedented situations, and we wanted to help you by sharing high-level information that could help your supply chain and organization during these challenging times.
EVOLVING ROLES: FROM SUPPLY CHAIN DIRECTOR TO CHIEF CHAOS MANAGER
Given all the unrest that’s unfolding around the world, we at Slimstock thought a little escapism might be welcome. So, to get the most out of this guide, we’re going to pretend that you, dear reader, are the supply chain director at Supreme Cycle Parts Ltd., Canada’s leading wholesaler of bicycle parts and accessories.
Supreme Cycle Parts Ltd is a simple business. As the supply chain director, you source many of your products from a small number of suppliers located in the Far East. From your main DC, these products are distributed to your retail customer all over Canada. Naturally, Ontario is your largest market, followed by British Columbia and Quebec.
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Demand management Infographic: A guide to expecting the unexpected!
Demand management is all about keeping customers happy. However, while no business wants to let its customers down, there are always constraints in place. Consequently, building substantial stockpiles of inventory to satisfy potential customer demand, which may (or may not) materialize, is simply not an option. So how should you anticipate, validate and prepare for future demand?
WHAT IS DEMAND MANAGEMENT?
To satisfy demand, inventory is a necessary evil. However, when you consider the impact of demand volatility, fluctuating supply chain costs and the need to maintain a healthy level of working capital, determining exactly how much capital should be invested in inventory is a difficult question. Effective demand management is all about balancing this risk to maximize customer satisfaction while minimizing inventory costs.
WHAT’S DRIVING YOUR DECISIONS AROUND DEMAND?
Customers rarely buy what you think they will purchase. If you expect a customer to place a large order and the demand never materializes, invaluable working capital could become locked up in excess stock. Likewise, if you decide not to invest inventory, and the customer does actually commit to the order, fulfilling the demand in time could be a real challenge.
In reality, you cannot please everyone- at least not without leaving your businesses bankrupt. Consequently, to remain responsive to demand, supply chain teams must have a robust process in place to anticipate, validate and then fulfil future demand.
Ultimately, when it comes to demand management, 5 vital questions should drive all decision making:
- What products do your customers want?
- How many units do they want?
- How soon do they want to receive the order?
- How likely are they to commit to the order?
- How much are you willing to risk?
HOW CAN YOU MAKE MORE RATIONAL DECISIONS AROUND ANTICIPATED DEMAND?
The starting point for any demand management process is the forecast. Using several years of demand history and the most appropriate forecasting method, effective demand forecasting tools can help businesses to identify trends in the data and thus gain an idea of what future demand might look like.
The question is, to what extent can you rely on this insight?
Historic demand can only tell you so much about the future. After all, from the impact of new customers, the global health crisis to weather on sales, there is an infinite number of factors that can influence demand!
Demand management is about more than just using historical sales to build a forecast. Demand management is about taking a robust forecast and enriching the data to make informed supply chain decisions!
DOWNLOAD OUR GUIDE TO EFFECTIVE DEMAND MANAGEMENT!
To help you optimize your approach to demand planning, we have put together a simple infographic to demonstrate how you can stay one step ahead of future demand. Complete the form below to download the infographic now!
Every year, Canada sees a massive fluctuation in sales across all industries. These fluctuations can be due to family day, thanksgiving, labour day, boxing day, etc. Also, due to its cultural diversity and the unpredictable weather patterns in the country, demand for products keeps changing.
Given the potential for huge fluctuations in demand, this can leave businesses exposed to a high level of uncertainty. For instance, when exactly does a peak season start? When does the season finish? How can you be sure to what impact the seasonal influence will have on-demand? Unless a business takes steps to control all of these factors, seasonal spikes in demand can quickly spiral out of control.
For some seasonal products, the uplift in demand can be easily anticipated. For instance, in the winter months, demand for barbeques drops off while demand for electric heaters soars. This is not rocket science: you know that these articles have a seasonal demand pattern. However, what you don’t know is exactly when the season will start as this is dependent on a whole range of factors such as the consumer’s mindset or even the weather.
To help you optimize your operations before, during and after a seasonal peak, we have highlighted 8 top tips covering the following points to help you stay ahead of demand fluctuations:
- Achieve optimal stock levels before, after and during a seasonal peak
- Align service levels with customer expectations
- Guarantee availability of seasonal products while avoiding excess stock
DOWNLOAD OUR GUIDE TO SEASONAL DEMAND PLANNING TODAY!
Complete the form below to discover our 8 top tips for effective inventory management during seasonal peaks.
Holiday season planning has become incredibly more sophisticated over the years; variety in promotions compounded with multiple channels and ever-changing customer expectations. It is fascinating to see how supply chain and more so demand planning can become a differentiating factor in such a situation.
UNAVOIDABLE REALITY OF MODERN RETAILING
For many managers in retail, promotions are an addiction: they know they are bad for them, but it is simply too difficult to change. While some retailers have moved away from the old days of flash promotions in favour of an everyday Low Prices Strategy, it seems the vast majority cannot seem to kick the habit. Ultimately, when the pressure is on, retailers still return to their old ways.
With more complex promotions to manage than ever before, what can retailers do to keep bargain-hungry customers happy while still ensuring the promotional activity adds value?
When the concept of "Black Friday" or "Boxing Day sales" first landed in Canadian stores, retailers enjoyed a welcome boost in sales. The problem is that customers have now got a taste for promotions and are simply no longer willing to pay full price for anything. Given that the average consumer is unlikely to fork out for an item unless there is at least a 25 percent discount on offer, it's virtually impossible for retailers not to have some form of promotional activity in place. Ultimately, these promotional events are the monsters that retailers created; now, they must do whatever they can to tame these beasts and optimize their approach to promotions management!
According to research, sales of promotional items now actually outnumber sales of items at full price. Given the importance of promotions coupled with the unavoidable disruption that comes as a consequence, local supply chain teams must manage promotional activity effectively.
Put: Ordering too much stock in advance of a promotion or inadequate replenishment during a promotion will tie up valuable working capital and could cause high levels of obsolesce at the end of the promotion. Equally, ordering at the wrong time or not ordering enough in the first place will result in lost sales opportunities and disappointed customers.
Slimstock Canada, along with Supply Chain Canada, had the pleasure to host a knowledge session on the topic Promotions Management to spread knowledge and share insights to manage the challenge of inventory management during the holiday season.
DOWNLOAD OUR PROMOTIONS MANAGEMENT PRESENTATION
In our straightforward presentation to better promotions management, we explore how retailers can maximize the value of promotions while simultaneously protecting margins.
Demand forecasting | With the promise of increased footfall and boosted sales, it is easy to see why organizations have become so dependent on promotions. However, “special buys,” “buy one get one free,” and even “price match” promotions all place a significant strain on supply chain teams.
To add further complexity, if demand forecasting is not managed carefully, it can have huge implications on the bottom line. So what steps can you take to achieve a genuinely painless promotion?
1. You can never plan too early!
Promotions take many different forms. However, even the most uncomplicated promotion requires careful planning. After all, unless the right stock is available in the right location at the right time, the promotion will be a waste of time.
To maximize the profit opportunity and minimize the risk of waste at the end of the promotion, the planning process must kick off well in advance. With the additional complexity created by short product shelf lives of fresh products, timing is everything!
2. Surplus stock will lead to sloppy results
With all the excitement leading up to a promotion, it is easy to get carried away. However, given that the vast majority of excess waste comes as a result of over-ordering in the first place, you must rationally anticipate the promotional uplift in demand. Unless the potential increase in demand forecasting is investigated adequately, they are at risk of eroding the value of promotional activity as surplus stock causes unnecessary waste.
3. Replenishment is a double-edged sword!
One of the biggest challenges of today’s trend of extended promotional periods is making sure the shelves remain stocked throughout the event. Even if an item sells phenomenally well, if the product sells out on the first day of the promotion, this will be a wasted opportunity unless the items can be replenished quickly and efficiently. On the other hand, however, if the stock is replenished too close to the end of the promotion, this also can result in excess and waste. As a result, replenishment must be both timely and well-aligned with the allocation strategy.
4. Don't forget your exit strategy
When it comes to promotions, the proof is in the pudding! Regardless of how successful promotion was, if the stock left towards the end of the promotion is not well controlled, this can result in missed sales opportunities and even waste. Consequently, you must ask yourselves: How can we squeeze the most value out of the stock we have left?
5. Keep clean and prosper
At the end of a promotion, most retailers are too worried about the next big event to think about the impact the original promotion had on sales. However, given that these historical sales data will be used to build future forecasts, organizations can not afford to drop the ball when it comes to data quality.
To ensure that their supply chain data is trustworthy steps to isolate promotional sales data from normal demand data. By keeping demand forecasting history, "clean" supply chain teams can anticipate future demand forecasting with confidence!
Clear as much stock as possible before the end of the promotion. Although this will often mean pushing the remaining stock to the locations with the highest sales volumes, taking steps to minimize the amount of promotional stock that has to be marked down will help maximize margins.
DON'T PAY THE PRICE FOR POOR PROMOTIONS MANAGEMENT!
There is no escaping the fact that promotions will always cause headaches for retailers. However, by following these steps, organizations can better prepare themselves to avoid the pitfalls of poor promotions management to ensure success!
Complete the form below to receive the promotions management PDF
Having thousands and thousands of products and trying to maintain 100% availability throughout the assortment would make most of the suppliers bankrupt. At the same time, customers cannot afford to put their project on hold because certain items, materials or components are sold out. So what can the supply chain do to improve availability without exploiting costs?
FIND THE BALANCE BETWEEN THE RELIABILITY AND COSTS OF THE SUPPLY CHAIN
Ultimately, service levels are a direct translation of corporate strategy and inventory strategy. As such, companies determine the extent to which they can meet the needs of their customers based on stock capacity. For many organizations, this is about finding a balance between the strategic desire to improve stock availability and the need to meet current financial constraints.
IMPROVE STOCK AVAILABILITY WHERE MORE AMOUNT
For many companies, the criteria for establishing these service levels are not clear. As a result, many organizations rely on the inadequate levels of service that, at best, are determined based on a quick and vague analysis. For example, when the level of service hurts the safety stock or the stocks, we have to review and adjust quickly (again, without any real analysis).
Finding an optimal level of service allows companies to focus their investments and efforts, which in turn helps increase availability in the items that are most needed. However, for a service level strategy to be truly effective, it must take into account a large number of components, including billing, capacity, customer demand and cost.
Find out how you can offer your customers a more reliable service with our 5-step guide. Through these steps, you can increase levels of availability and customer satisfaction while reducing supply chain costs.
Download our guide and start optimizing your service levels today !!