- It’s based on rules and logic that everyone can understand
- Regular review and reclassification of products reduces the risk of outdated stocking policies, overstock and stock outs
AX - biggest sales volume, lowest cost
Through to
CZ - lowest sales volume, highest cost
AX are your lowest risk products – high volume, stable sales with low cost of product. These are the products you should aim to always have available. CZ are your highest risk products – low volumes, often volatile of sporadic sales patterns, with a high cost of stock. These items could be managed with vendor owned inventory if you purchase your goods for sale, or with consignment stocks and minimum order quantities if you manufacture your goods. Looking at ways to reduce your liability on these items should be a priority. The holy grail of having the right stock of the right product is ever elusive… You’ll never get it right 100% of the time, but you can get close if you stay agile, adapt and review your inventory policies. 3. Ditch the Dead Wood In a similar vein to resolution 2: you have to constantly review and assess your range and product offering if you want to stay in good supply chain shape. Don’t be afraid of the range reaper… Low sales lead to written off stock and unnecessary storage charges for product you can’t or won’t sell. IF you catch it early, you may be able to work with your supplier to do a stock cleanse so that they can sell that product to other customers. Ultimately if it’s dead, let it go. 4. Reflect and Assess We are drowning in data. Over the years, the number of KPIs, reports, and targets can easily get out of hand. Take a minute, grab a coffee, and take a good look at the information you actually need on a regular basis. What are you trying to achieve? Where are you targeting growth and change? How do your reports, KPIs and other metrics help you to get there? Personally, I’m a fan of changing up your reports as you adapt your strategy and projects for the year. Not only will it keep you focussed on the task on hand, but the more you change up your reporting, the harder it is for people to get wise as to how to fudge the numbers or ‘play the game’ (we’ve all experienced this!). Data and reports should help you to drive, measure and monitor change, adherence (and inherently non-adherence), or act as warnings to major issues. If your reports aren’t doing this you probably don’t need them. 5. Get Physical The final resolution 99% of us could stand to make is to step away from the technology and interact with our colleagues. How many of us can honestly say the best solutions, changes and fondest experiences in our careers can solely from an email chain? Be less robot and more human… I guarantee you’ll like it! About the Author: Rachel Sellers is an experienced global commercial planner, and also an Associate Lecturer at the University of Manchester Business School If you are looking for top talent with all the skills required to streamline you Supply Chain please call us for information regarding candidates we are working with on 0161 825 0825 or alternatively, register a procurement vacancy here
