Storehouse: Stockpiling Stuff

Retailers are working more closely with suppliers and customers to keep the right items in stock at the right time, reports a recent inventory management study conducted by KPMG Consulting for Chain Store Age magazine. (One alarming reason for this is that shopping is no longer a “leisure activity” but a”more purposeful chore,” according to KPMG analyst Brad Bogan.) Nearly three-fourths of the retailers surveyed share information with their vendors to improve inventory management, with 33% of merchants sharing important margin information. Fourteen percent are daring enough to provide their suppliers all sales, inventory, customer service, gross margin return on investment, shipping, and replenishment data.

This level of collaboration with suppliers and customers may well be the next big thing in inventory management, because internal practices remain pretty much the same. No revolution has occurred in physical stock-taking and reconciliation methods, and the top five measures of inventory management performance haven’t changed from last year: gross profit percent, inventory turnover, gross margin dollars, gross margin return on investment, and average in-stock position.

Top 5 Inventory Trends

77% Greater use of technology
58% Internet used to link with vendors
50% Recording inventories using SKU/UPC
46% More cycle counts
41% Cycle counts by SKU
Source: Chain Store Age/KPMG Consulting, December 2001

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