The key to the success of any business is the availability of the product when the customer desires for it. Once the business plan is made and the marketing takes off the next most important step is inventory forecast based on the market reaction and eventually inventory replenishment.
Inventory management was initially done manually that involved whole lot of manual calculation. The retail buyers too were experts in maximizing their sales while maintaining an inventory that was in line. There were many however, who struggled to maintain sales and inventory in line. These retail buyers turned their inventories at a very slow rate trapping in a lot of cash that would mean less profits and a whole lot of overstock every season. There were still others who sold at a certain rate without maintaining inventories. These retailers were unable to keep up the pace of sales due to less stocks loosing out in a long run.
The innumerable soft wares available today solve the problem of manual calculation. The availability of retail information system caters to the needs and the requirements of the retailer for inventories. Retailers in all the segments have utilized the advances made in retail information technology to maximize profits.
As the applications become more refined with exact details of demand forecast and inventory management models, it still depends a lot on the skill of the business person to interpret the data available in the right manner. The applications after all will not be able to do thinking for you. The thinking and interpretation needs to be done day in and out for profits. The applications will only facilitate the individual to take right decisions and make the inventory management work in the retailers favor. Sales planning and inventory replenishment modules too are usually incorporated in the sophisticated inventory planning packages.
ERP is an effective inventory management tool specifically aimed at the small retailers. These packages are however, not utilized to the fullest by the small retailers due to the limitations of the demand prediction and inventory management functions normally included in these soft wares. These tools capture the data provided and address the reporting in an amazing number of combinations. These soft wares have short comings that should be taken into account and not followed blindly. Demand forecasting should inventory management functions are just not sufficient to efficiently manage their stock.
The basic rules of inventory management and retailing remain unchanged. A successful business person has to understand the end customer well. Their needs, requirements and future expectation need to be taken into consideration. All this along with the data from past and the present day trend will help to formulate a basic successful inventory plan. The plan needs to be updated on a daily basis as the season progresses and specific trends have to be worked upon on urgent manner. Use the latest technology effectively for positive end results but do not solely depend on it.