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    Inventory management is one of the core-operations that contributes to the success of a retail operation. In principle, it can be stated as the process by which a retailer ensures the availability of stocks in accordance with the emerging demand. The process has to ensure that neither there is an exhaustion of in-demand stock nor over-accumulation of slow-moving stock.

    When the process meets both criteria, it is said to be a successful inventory management operation. Effective inventory management allows the retailer to run the operation with more information which could include – product locations, quantities of SKUs, fast- or-slow-moving stock, profit margin according to product type, ideal quantity of inventory, quantities to reorder, products to discontinue, the effect of seasons on sales, etc.

    All-in-all inventory management is critical to the generation of profits for the retailer. The operation should be mounted in such a manner that the business does not miss out on a single sale due to out-of-stock scenarios while maintaining optimum stock levels without the stagnation of invested capital.

    The write-up is an attempt to shed light on the major aspects of how to manage inventory and how to create an inventory management system using the points mentioned here. These said processes can be implemented through standardized processes or Standard Operating Procedures (SOPs). Let’s now turn our attention to major pointers, explained below to gain insights and understanding of inventory management:

    • Auto Re-order Level: The entire management of inventory in a company is standardized wherein reordering of stocks is automated based on pre-defined criteria. This would divide the stock quantities into fast- and slow-moving categories. By the criteria, the fast-moving stock or the “in-demand” stock should not go out of stock. Meaning, the reorder process gets triggered when the level of the stock reaches a pre-defined measure. On the other hand, the system also has to ensure that slow-moving stocks or “low-demand” do not get ordered above a certain level to prevent the over-accumulation does leads to a “dead stock” situation.

    Such a system can even ensure there is better cash flow management where there is more capital invested in a fast-moving stock with less emphasis on slow-moving stock. This process can be implemented by the incorporation of SOPs which can play a critical role in minimizing wastage while increasing the operational efficiency of the entire operation.

    • Inventory Analytics: This process is closely aligned with inventory optimization wherein the retailer makes the stock quantities available as per the demand and supply in the necessary quantities and the right locations. The calls for retailers carry out ABC analysis for the stock, wherein the stock is divided into three classes based on the relative priority of an item in line with demand. Here, 5-10 percent, the most important are classified as “A”, the next tier “B” consists of 15-25% of the inventory, and the rest is classified as “C”, the least important of the lot that would consist 65-80% of the inventory. Such classification allows the retailer to eliminate the carrying costs and reduce “dead stock” to a considerable extent.

    Along with the process, retailers must have in place corrective measures to mitigate unplanned demand spikes. For such events, predictive activities such as inventory forecasting must be made part of the process to resolve irregular demand concerns. Inventory analytics can be made a standard procedure in inventory operations where companies generate an abundance of data through their regular sales transactions. YRC comes with expertise and experience in devising SOPs for all such processes associated with the best way to manage inventory.

    • Inventory Handling Guidelines: The objective of this practice is to avoid damage to the inventory during the coordination and management of the same. This would include providing proper equipment for handling the inventory for the workforce. It would include providing mechanized equipment for moving stock, proper racks & bins for storage taking account of weight capacity.

    Next, the process to manage inventory effectively should have the least number of touchpoints. Meaning all physical counting and associated quality checks should be a one-off affair without the scope for it occurring in multiple stages. With such standardization of process, the probability of disposal of stocks due to damage amounts to a minimum.

    • Inventory Audits: This is a procedure to gauge the quality of an inventory at any given time. And primarily it can be classified into two categories – a global audit and a sample audit. The global audit would encompass the entire inventory, while the latter would only take into consideration a specific segment of the entire stock. The audits are mainly focused on ascertaining any damage to the existing stock, checking for the expired stock, and reconciling the stock count on the system versus the inventory floor.

    Besides this, inventory audits differ when it comes to high-value and low-value goods. While in the former each SKU is given consideration, the latter only takes into account a small sample of the entire stock. Such standardized procedures when implemented ensures that there are minimal issues to the product when it reaches the customer, reducing possibilities of complaints emanating from the customer’s end.

    Benefits of Inventory Management

    Now that we have spelled out the process that can drive better inventory management, let’s delve into the details of the benefits associated with inventory management, here it is:

    •  Improves the accuracy of inventory orders: Proper inventory control would allow the retailer to avoid product shortages and allow the warehouse to store just enough without letting-in more than the required quantity.
    •  Ensures an Organized Warehouse: Through inventory management, a retailer can place their best-selling goods in the most accessible locations. This allows accelerated order fulfillment and keeps customers satisfied.
    • Saves Time and Money:  The retailer is not compelled to do an inventory recount of the necessary management procedures are carried out as per established protocols or SOPs. Also, with better inventory control, the retailer would not spend capital on the slow-moving stock.
    •  Improves Efficiency and Productivity: By putting in place devices like barcode scanners and other inventory management software applications will help increase productivity and performance to unprecedented levels.
    • Improves the Scope for Repeat Customers: Through successful inventory management, there are minimal chances of negative feedback from customers improving the scope of retaining customers who over time would become brand loyalists.

    About YRC: Inventory Management Consultants

    At YRC, we come with expertise, knowledge, and experience to ensure successful implementation of inventory management techniques. By implementing SOP for inventory management, our clients have been able to increase inventory turnover, improve profitability, and have managed better cashflow. We come with the specialty of creating system-integrated and financial feasibility linked SOPs that are system-dependent and less person-dependent. This ensures that the SOPs seamlessly get integrated into the existing infrastructure.

     

    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.