The Importance of Managing Stock Levels and Reordering for Best Cash Flow | Strategies and Insights

The Importance of Managing Stock Levels and Reordering for Best Cash Flow | Strategies and Insights

Monday June 10, 2024 | Posted at 9:19 am | By Harriet Pritchard
June 10, 2024 @ 9:19 am

We recently spoke with ChannelX on the importance of stock management. Avoiding stockouts is crucial as they lead to lost sales and dissatisfied customers. Conversely, excess inventory ties up capital and increases storage costs. 

Stocked shleves in a warehouse

The key benefits of well-managed stock levels:

  • Predicting and meeting Customer Demand: Having the right products in stock ensures customer satisfaction.
  • Cost Management: Accurate demand forecasting and stock management enhance cash flow and profitability.
  • Operational Efficiency: Proper stock levels reduce customer inquiries and the resources needed to address them.
  • Supplier Relationships: Collaborating with suppliers on forecasting improves stock availability and may yield better terms.
  • Data-Driven Decisions: Understanding demand and seasonality trends helps optimise inventory for growth and profitability.
  • Future Planning: Analysing past and present data helps anticipate changes in consumer behaviour and preferences.

Practical Implementation

How do we help our clients achieve this balance in practice? Volo Vision, our reporting and analysis suite, provides comprehensive tools to manage inventory effectively. Here’s how a typical Volo user might approach stock management:

  • Inventory to Sales Ratio Report: Start with this industry-standard metric to ensure your inventory levels align with best practices.
  • Dead Stock Report: Identify slow-moving stock and consider promotions or discounts to free up cash.
  • Stock Outages Report: Review products with sales and stockouts to understand potential sales losses and plan replenishments.
  • Automated Notifications: Set up email alerts with reordering information or let the system generate reorder POs automatically.

Interested in find out how Volo could help with stock management? Get in touch to find out more.

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