Over the past few years, distributors have seen unprecedented challenges. From labor shortages to extended lead times to totally unpredictable supply and demand, inventory management has been difficult to say the least.
We’re not out of the woods yet.
That’s why many distributors are thinking more intentionally about how to be more proactive about inventory management. There are some good reasons for taking a more assertive approach.
Many distributors are still reeling from the pandemic years when everything felt unknown. In particular, the unpredictability of customer demand and unpredictable lead times presented real hardship. Many distributors were caught without access to the items their customers wanted or were stuck with too much inventory after buying up more than they needed.
The increase in demand for omnichannel support has also made inventory management—and the need for systems to talk to each other—more challenging.
In a recent survey Sikich conducted with Modern Distribution Management, more than 71% of distributors said they felt they could be doing better at their current inventory management practices.
Savvy distributors want to avoid repeating the problems of the past few years and plan ahead with better forecasting, improved data and stronger communications.
Here are some examples of what it means to be proactive when it comes to inventory management right now:
Taking more farsighted steps toward better inventory management isn’t just a nice idea. Neglecting to act now can result in real costs to your distribution business down the line.
These costs might include:
There are true costs to not taking a proactive approach. Not only does it leave you feeling like you have less control, but it risks continued unpredictability and instability in your business.
Being proactive should be a mindset shift, taking into account all the ways your distribution company can benefit by tracking data, improving communications and investing in accurate forecasting.
To learn more about how you can stop reacting and start investing in your operation’s success, contact one of our experts and schedule a consultation.
This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.