Inventory Management

Given the information provided, here are tailored inventory management strategies to address your specific challenges and optimize your inventory control:
Dynamic Reorder Point Calculation:
With a turnover rate of 5 times per year and a lead time of 2 weeks from suppliers, dynamically adjust reorder points for each SKU. For best-sellers, factor in higher safety stock levels to prevent stockouts.
Given that you have higher sales during the holiday season, adjust reorder points upward for key products during this time to accommodate increased demand.
Inventory Segmentation (ABC Analysis):
Segment your 500 SKUs into ABC categories based on their sales volume and revenue contribution. This will help prioritize stock control:
A Items: High revenue contribution but low sales volume (e.g., premium electronic gadgets). Monitor closely to prevent stockouts.
B Items: Moderate revenue contribution and sales volume.
C Items: Low revenue contribution but high sales volume. Minimize overstocking.
Refine Forecasting Method:
If you're using time-series analysis, incorporate external factors, such as planned marketing campaigns or economic indicators, that could impact sales.
Explore integrating machine learning-based forecasting tools within Oracle NetSuite for more accurate demand prediction.
Excess Inventory Management:
For overstocked seasonal items, consider bundling them with best-sellers as promotional packages or offering discounts to clear stock before they become obsolete.
Negotiate with suppliers for a return or exchange agreement for items that don't sell well.
Optimize Holding Costs:
With an inventory holding cost of $10,000 monthly and a maximum storage capacity of 15,000 units, focus on JIT (Just-In-Time) inventory management for products that have predictable demand and stable lead times.
Explore opportunities to negotiate volume discounts with suppliers without significantly increasing holding costs.
Inventory Management System Enhancement:
Utilize advanced modules and plugins available for Oracle NetSuite to automate reorder processes, notify when stock reaches minimum levels, and provide insights on slow-moving items.
Set up automated alerts for stock levels approaching maximum storage capacity, especially during peak seasons.
Synchronize Inventory Across Channels:
Integrate the inventory system of your online store with your two physical outlets. Real-time synchronization ensures consistent stock levels across channels, reducing the risk of overselling.
Regular Inventory Checks:
Given the frequency of monthly checks, consider employing cycle counting. Instead of counting your entire inventory, count a specific subset. This will reduce disruptions and ensure more regular and accurate counts.
Returns Management:
With a 30-day return policy, create a separate section in your inventory for returned items. Inspect, refurbish if necessary, and reintegrate them into your main stock quickly to maximize resale potential.
Supplier Relationship Management:
Maintain open communication with suppliers. Discuss challenges, negotiate terms, and explore possibilities of dropshipping for specific products to reduce holding costs.
By implementing these strategies and continuously monitoring and adjusting as necessary, you can enhance inventory management efficiency, reducing costs while ensuring product availability for your customers.