Inventory turnover is directly related to a retailer’s profit as well as efficiency; therefore, it is of great importance. It describes the number of times a business’s inventory is sold and purchased over a given period of time. A high turnover is indicative of good sales and productive stock holding, while a low turnover may indicate slow sales cycles, bad buying decisions, and overestimating stock to be held. For retailers, sustained growth is possible only if this metric is mastered. These days, inventory managed manually and without much thought is bound to turn into a disaster. This paper focuses on the drawbacks of dated inventory control and how Oracle NetSuite real-time inventory features can finally solve a retailer’s concern, enabling greater inventory turnover.
The Problem with Manual Systems: Dead Stock, Stockouts, and Inaccurate Numbers
Many merchants, particularly small- to mid-sized ones, continue to rely on outdated systems such as spreadsheets and rudimentary point of sales systems to manage inventory, which is as good as ignoring modern alternatives. These oversights are bound to fail and cause pain points which impact inventory turnover directly.
Issues such as ‘dead stock’, or inventory which remains unsold for long periods of time are a case in point. When purchases are made based on sales history rather than emerging trends, this is an inevitable conclusion. Dead stock results in lost opportunities, physical space, and financial resources, and is a downward cycle.
Conversely, simple systems are rife with stockout issues, which result in a popular item not being available for a customer to purchase. This not only results in potential sales, but puts a brand’s image on the line as well. Stockouts stem from a lack of awareness of real time stocks, and range of sales points available in different locations. It is a frequent occurrence for a retailer to possess an item in the warehouse, yet, due to a nonfunctioning sales floor system, miss opportunities to cash in on sales.
Finally, the writing of all of the data is wrong. Companies take a lot of time to losing track of their data. Employees cannot submit their working records on time. Data is updated slow down or little. People can make mistakes. There is a disagination of records from the actual stock of the business. No tall grass down to is the dository makes parties impossible of taking any predefined definition Primavera put purchase or stock in the middle of alley turns sales. Garden makes impossible.
NetSuite Inventory Features: Demand Planning, Real-Time Stock Visibility, and Automated Replenishment
NetSuite provides state-of-the-art tools tailored for inventory management to improve upon the inefficiencies of manual systems. All tools of the NetSuite feature set reside on a single cohesive architecture which gives the retailer complete insight into all operational facets.
NetSuite is renowned for its Demand Planning based on historical sales data, seasonal patterns, and promotion data to provide robust sales forecasts. Rather than winging numbers, retailers have a data-backed order prediction system which ensures demand is met, overstocks, and stockouts are avoided.
Relevant stock data is probably the most revolutionary characteristic of NetSuite. A single source of truth is created as all stock movements are recorded instantaneously from goods received to the point of sale online and on all connected stores. A store manager has detailed information on any stock and can check what is in the warehouse, on its way, or in another store, for easy fulfilment and transfers. This eliminates siloed information, fulfils all data accessibility, and provides a complete picture for responsible inventory management.
The last step is automated replenishment. NetSuite can swiftly create and order purchases to restock items well ahead of time. This is done based on the demand plan, real-time stock levels, and the configured minimum and maximum stock levels, lead times, and preferred vendors. This process removes the guesswork and robotic effort of the restock. Businesses thus can always rest assured knowing that there is enough stock available at the required period.
How Retailers Benefit: Improved Stock Accuracy, Better Forecasting, and Reduced Carrying Costs
Utilizing NetSuite’s inventory management capabilities, retailers strategically improve their inventory turnover cycle are a byproduct of multiple, quantifiable gains within their operational infrastructure.
To start, accuracy of stock is vastly improved. The real-time, unified system corrective eliminates the discrepancies of physical inventory and system inventory. Because of the precision, cycle counts can be more accurate, and full inventory counts is no longer needed. Trustworthy data resulting in accurate numbers can lead to better decisions.
In addition, improved forecasting is gained. Demand Planning is one of the rare systems whereby one can move from a purely reactive approach to a proactive approach in inventory. Better predictions of sales increase the efficacy of the investment in the purchase and production schedule. Other than better turnover, increase in planning rigor for demand seasonality and promotions provide stronger planning to increase preparedness for demand.
In the final analysis, and the most important, NetSuite aids in the decrease of carrying costs. The holding of inventory in warehousing plus the expenses for protection, labor and depreciation comprise the carrying costs. Carrying costs diminishes because of over stock due to dead stock, freeing capital from inventory for reinvestment, increases the agility and profitability of the business, which enables greater investment into marketing, expansion and increase in other growth strategies for the business.
Case Insight: Example Scenario of Poor Turnover vs. Optimized Turnover with NetSuite
Imagine a hypothetical retail company called “Manual Merch” which uses a workbook-based approach as compared to “NetSuite nirvana” which uses NetSuite. Both companies retail modern clothing and apparel.
Manual Merch’s Experience:
The owner of Manual Merch checks their workbook every week in assessing new orders and comes up with a “decision” based on how sales were a month ago and on a “gut” feeling. What they do is almost always place an order of 500 new T-shirts which is a new addition on their lineup. However, due to the unforeseen social media viral events, the demand for the other designs becomes overwhelming. Manual Merch ends up flat-footed. They rapidly run out of the popular T-shirts, which is a lost opportunity of earning thousands of dollars, while the 500 they ordered sit in the inventory as dead stock. They lose most of their credibility, due to very slow inventory turnover, and excess carrying costs.
Experience With NetSuite Nirvana:
Nirvana NetSuite utilizes a demand planning feature. The system detects the real-time spike in demand for the new T-shirt style. It recalibrates the forecast and automatically generates a reorder alert for the warehouse manager. With a few clicks, the supplier receives a purchase order. The automated replenishment feature ensures that new stock in unison with sales. With unmatched swift delivery, stockout avoidance, and maximized sales, sales kept growing. Their carrying costs are low while inventory turnover is high. The reputation for being a dependable supplier for current trends is reputation is unshaken.
This demonstrates the deep impact that a system without human interfacing can have. NetSuite moves companies from market reactive to proactive by driving change anticipation and continuously adapting business strategies to capitalize on such shifts.
Conclusion: Ecobsoft as the Partner to Implement Inventory Optimization Solutions in NetSuite
Optimizing inventory turnover is a necessity for any retailer aiming to survive, let alone thrive, in a competitive environment. Those relying on manual systems which generate dead stock, stockouts, and inaccurate data, need look no further to comprehend the need for change. NetSuite provides the single most important change that enables a retailer to gain real time visibility, precise forecast demand, and automated replenishment. Retailers, under these conditions, improve their inventory turnover, lower their carrying costs, and ultimately make capital available for growth. The seamless implementation of an advanced system like NetSuite is tailored by internal strategy and external experience, which is why trusted third parties such as Ecobsoft find their market. Streamlining inventory systems so a business can transition to a NetSuite implementation fully automated and considerably more profitable is the goal. From these conditions, their team will obtain the most relevant benchmarks and closely derive a NetSuite implementation strategy tailored to the business in question. Ecobsoft helps businesses to gain the data driven and more flexible system, which in return enables them take down the next competitor.
