Stock Management Safety Buffer

Ask yourself a key question: ‘What is the main goal of my business, a trading network that leases a retail space to a supplier or to ensure the availability of goods with no surplus, to satisfy the customer’s demand to the maximum and please them with a beautiful window dressing filled with fresh goods?'

Cory Kirkland, Business analyst

Modern trading networks dazzle with a variety of goods for every taste and wallet. Trading equipment for a retailer is both a tool that helps a product to reach the final consumer and satisfy his needs and a valuable resource that is important to use competently and effectively.

 

Manufacturers are trying to fill the space on the shelf as much as possible: they constantly release new products, compete and offer more favorable conditions for the trading network. However, apart from the question of how much to purchase (the answer to which the inventory management system of ABM Inventory helps to get), it is important to understand how to present this product to the buyer.

 

It is not a secret that a proper presenting of goods affects the success of the trading network and helps attract buyers. In addition, the correct layout also affects the efficiency of inventory management. It should demonstrate the best qualities of the product and make it visible and attractive to the buyer. The ABM Inventory system has a unique parameter that affects the quality of the calculations - the safety buffer (SB).

 

We will cover the following questions:

  1. What is a security buffer and its purpose?
  2. What factors need to be taken into account when completing the “Security Buffer” parameter and how to check whether it was entered correctly.
  3. Additional areas of security buffer usage.

 

Security buffer (SB) is a stock of goods that is not intended for sales and provides the "beauty" of the shelf. It is filled before connecting to the system and is not controlled by it.

 

Unfortunately, there are often difficulties in understanding of the importance and proper management of this parameter. There are networks that are guided by the rule: the shelf must be filled to the maximum and only then it will attract the buyer and provoke him to buy a product. The situation is aggravated by the requirement of some suppliers to provide a fixed shelf space only for their products.

 

Unfortunately, such a belief plays a cruel joke with the company and impedes development. You may remember that there are often shelves full of dusty and outdated goods in such. It no way helps the company and besides the company freezes cash and shelf space that can be used more efficiently. Whatever the width of the shelf is, the goods should be placed on it relatively freely. Otherwise, it is lost in an oversupply, and may not catch the buyer’s eye. Thus, it is important not only to ensure the quantity of goods but also the quality of their presentation.

 

In the ABM Inventory system, along with the main security buffer, you can use additional parameters:

  • ▷ SB for extra shelf. In case goods are placed both in the hall and in the checkout area.
  • ▷ SB for sales. If you need to display the goods more while they are on sale (for pallets, branded commercial equipment from the supplier for the period of the promotion, etc.). Such a safety buffer will be installed in the system only while it’s on sale; after it can be sold out.
  • ▷ Safety stock. You can specify the number of days or delivery cycles during which it is necessary to maintain additional stock based on current sales of the product.

 

With the help of “Stock structure of MTS products by buffer areas” report in the ABM Inventory system, you can track the dynamics of stock structure and identify negative factors that can affect it in time. In this case, an imbalance in the structure of reserves is obvious - an overestimated safety buffer. Such inventory situation can be easily optimized after identifying the problem and revising the indicator.

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