Inventory Planning Sometimes Seems Like a No-Win Proposition. Too much or not enough, each scenario has a serious impact on a business’ reputation, efficiency and profitability.
But you can achieve optimal fulfillment, forecast and inventory turn results through the alignment of the appropriate processes, systems, and most important, people. What makes a great inventory planner? Here are professional qualities inherent in the most successful planners.
- Quantitative analytical skills
There is no substitute for strong analytical skills and logical thought processes as key components of a planner’s mindset. Planners need to have a proclivity for working with numbers, reports and data analysis.
- Systems aptitude
Planners must also have the aptitude to understand and use the systems and programs that support the planning and decision-making process. A successful planner is proficient with planning systems, but also knows that systems have limitations and do not always account for unanticipated variables and evolving trends.
- Technical knowledge
An astute planner understands the definitions and formulas of the key inventory metrics. The planner should know what it means to “turn” the inventory, how weeks of supply and safety stock are determined, why it’s crucial to judiciously use open-to-buy dollars, and so on. Inventory planners should understand the statistical factors and variables producing the forecast, yet be aware of variances, risks and accuracy levels.
Successful planners have the ability to think globally and strategically, with a perspective of the business beyond the SKU level. Planners must understand the aggregate inventory positioning as it relates to the instock, open-to-buy and turn objectives. They are aware of the business strategy and how their decisions can affect the overall success and profitability of the organization.
- Clear communication
Good inventory planning requires direct and timely communication of relevant issues to all appropriate stakeholders. There should be no reason for uncertainty or surprises along the supply chain highway. Great planners can also extrapolate meaningful insight from large volumes of data, summarize it and communicate findings in a concise way.
Planners should treat their area of responsibility as if it were their own business or store. This level of focus requires the diligence and pride to do what is necessary to effectively manage the shop. Planners should be engaged and accountable for the achievement of their assigned strategic goals and results.
Not everyone can sit in front of a computer for eight hours a day, concentrating on numbers and spreadsheets. Planners must have the discipline and the ability to focus on a range of various SKU-level details. The top-level plans/forecasts are important, but the SKU-level inventory position ultimately determines the customer fulfillment and inventory related expenses.
It’s critical for planners to maintain a practical perspective and not get buried in the minutia of voluminous data. The 80/20 rule applies to SKU management, as generally 80% of the sales volume is generated by 20% of the SKUs. The planner must prioritize his or her workload to first address the critical 20% of the SKUs that have the greatest impact on the business.
- Sound judgment
A planner should have a pragmatic approach to decision making, using system recommendations and qualitative analysis to evaluate risk/reward scenarios and make the appropriate decisions that are aligned with the strategic goals.
Planners should evaluate system-generated recommendations for reasonableness to avoid unintended output, and be able to approach problems and data objectively and form conclusions despite ambiguous information.
Planners must have the initiative and diligence to persistently manage issues through to resolution. They need to build collaborative relationships with business partners to coordinate operational processes and to help resolve issues.
The best planners see that every step of the supply chain is executed efficiently to ensure timely instock. They have the persistence to follow through and not accept “no” for an answer when hitting roadblocks within the supply chain.
- Proactive/sense of urgency
A strong planner identifies opportunities and risks to the business, using the appropriate level of urgency to address critical issues. The planner’s early identification of fast or slow sellers allows for actions to maximize revenue opportunities or reduce expenses. Addressing opportunities and issues quickly can generate revenue and control expenses.
- Positive attitude
The most successful people in any job have a positive attitude and a desire to continually learn and contribute excellence in the job’s execution. They have an enthusiasm for the challenges and they work passionately to meet or exceed their assigned goals.
BY PAUL ANGELOS: (email@example.com) has 25 years of inventory control and supply chain experience and specializes in developing retail planning processes and systems