Excess inventory at stores is a problem for many retailers. The main reasons for the increase in surplus at retail outlets are as follows:
- the remains of the failed sale;
- a sharp decline in demand in the store;
- unreasonable oversupply from suppliers;
- manager's miscounting in the forecast.
At the same time, both retail and warehouses of most stores do not allow storing excess stock. Often, stores may not even have storage space, but only retail space, which further complicates the issue of store inventory management.
It is important to understand that the surplus at some stores of the chain may cause a shortage of goods at the others. And with a huge amount of goods and points of sale, it is difficult to track all the links and as a result, the goods can be ordered again and again to the central warehouse from an external supplier. This way, the company invests money in the purchase of goods that may be in surplus in the network already.
According to the Theory of Constraints, an effective solution to this problem is to return to the central warehouse for the further redistribution of goods through the network to stores where there is a shortage without ordering from an external supplier.
In the ABM Inventory system, this feature is implemented in the following way:
- Select the goods at the store, the remains of which is above the buffer zone (target stock level).
- Mark the items you want to move and click the button "Move the surplus".
- Next, select the warehouse, which should take the excess and click "Create special orders."
After, the system automatically generates movements from the selected stores to the central warehouse and calculates the amount of excess inventory on the store.
As a retailer, you should monitor the status of the stocks and do not allow surplus!