If your organization does not adequately prepare for seasonal demand, you might be in trouble! To ensure you are appropriately designed to handle seasonal demand pressure, you must know how to maintain inventory accuracy.
Knowing inventory accuracy is the foundation needed to handle all these inventory control issues properly. Once you have mastered inventory accuracy, you can plan accordingly by knowing how many people you should hire for the floor, exchanges/returns, and management.
What Is Needed To Handle Seasonal Demand Properly?
Demand is usually higher in logistics and other distributors. Therefore, these types of organizations will usually need the following:
• More human resources
• Additional operational management
• More stringent shipping and delivery measures
• Tighter handling of exchanges and returns.
In some cases, you may have current personnel in management, exchanges/returns, and on the floor to work overtime because hiring more personnel tends to be more expensive than adding more hours to current employees. And as previously mentioned, you can work to ensure your shipping and delivery measures are intact through various software systems, workforce, and operations.
Demand forecasting is the surefire way to be as accurate as possible when it comes to your inventory. It estimates the required demand for customer requests for a given period in the future. Business owners, managers, and marketers look at various analytical tools:
• Historical reports of sales for previous seasonal periods
• Artificial intelligence (AI) to review their customers' buying habits
• Relevant market reports
• And more
Using these tools will go a long way to obtain an estimated guess for the number of products to have on stock. You will be able to reduce the propensity of underestimating or overestimating your supply.
Also, you can be ahead of two main variables: Supplier lead times and ordering costs. You can be on track with the lead time that goes on during the ordering time and delivery time. You also can purchase enormous batches for a reduced item unit price. Additionally, you can make sure you have the correct size of your inventory safety stock to avoid stock-outs, leading to lost sales and inflated carrying costs.
Demand forecasting is hands-down the foundation of handling the pressure of seasonal demand. So, to enhance your demand forecasting accuracy, you should do the following:
Keep Other Variables Separated From Seasonal Demand
This is important to ensure your data for demand calculations are clean and easy-to-use in forecasting.
Outliers are not as predictable as the overtime tracking of seasonal fluctuations. There are times when unusual demand occurs due to events that are known or unknown. New events could be natural disasters, pandemics, competitor promotions, etc. Known events could be huge one-time orders, sales promotions, or employee strikes, for instance.
You can detect outliers in different ways, but flagging them in your demand forecasting is the most important thing to do. That way, you can prepare the best you can for unusually low or high demand.
Forecast Calculation Accuracy
The more you can accurately calculate forecasts, the more effective you can simultaneously handle customer demand and lower costs. With more accurate calculations, you can eliminate disruptions within your operation by identifying individual items’ demand patterns. You can also prioritize products by determining those that need more attention.
Management Of Safety Stock
Safety Stock is an extra level of inventory (a cushion) that you maintain to prevent stockouts. Applying this concept maintains a buffer against supply chain variability. Since demand is one of the factors that can be highly unpredictable, safety stock should be an essential part of your strategy.
Other Tips To Stay On Top Of Seasonal Demand
Order fulfillment streamlining through shipping and delivery, demand forecasting, and other tips previously mentioned goes a long way for top-notch inventory management during the season. However, when it comes to inventory management during those times, other aspects must be considered. These tips are as follows:
Seasonal Product Categorization
It is vital to stock according to the product life cycle to distinguish seasonal products from products sold all year. On the other hand, some products that sell year-long spike more during certain seasons. Some examples include pie shells, pumpkin pie filling, and aluminum foil.
Learning Seasonal Demand Timelines
When it comes to short lead times, you will need to reduce inventory risk by buying more of that required product. For long lead times, you will purchase items ahead of peak demand time.
Learn And Choose Your Software Options
Online companies and some traditional companies that also sell online will utilize a retailer or inventory management platform. These tools can do various important tasks, like a personalized invoicing, interactive point of sale, credit card accepting ability, and inventory management.
When it comes to inventory management, you already have a job in ordering and sustaining stock. You also have a challenge in keeping costs as low as possible and meeting the customer’s demand. Furthermore, these responsibilities are heightened during seasonal demand.
Therefore, it will behoove you to take heed of the tips mentioned above. And for more information on tips to stay on top of seasonal demand and for pallet builders near you, contact Pallet Market, Inc. today. For over 20 years, this organization has been buying, recycling, and selling pallets for the Southern California area. They also can make custom-made pallets for you. This company consists of experts in helping their clients maintain costs through recycled pallets, expertise in keeping warehouses efficient, and more.