Following our very informative recent virtual roundtable of supply chain executives facilitated by my colleague David Kane, I was anxious to take a turn in the moderator’s chair for our next executive roundtable, ‘How to Maximize ROI of Your Inventory in Today’s Uncertain World?’, this past August 11.
As usual, we were fortunate to welcome representatives from a broad range of companies—in this case senior merchandising and supply chain executives from international luxury fashion brands as well as one of America’s leading home improvement/DIY retailers.
We kicked off this session with a novel added incentive—a virtual wine tasting, courtesy of Napa’s Grgich Hills Estate Winery. But none of our attendees would exactly require a glass of wine to encourage them to share their firsthand experiences with today’s numerous inventory challenges. We wanted to focus on the impact of misplaced inventory upon retailing—gluts of excess/out-of-season inventory as well as nagging out-of-stocks—exacerbated by lingering point-to-point logistics disruptions, inflation, and other external drivers.
While our panel generally recognized the value of demand forecasting at the front end of the inventory cycle, we were very intrigued to learn more about steps they’re taking to mitigate their real pain point—relationships with suppliers and vendors as they struggled to meet fill rates and MOQs. They acknowledged a significant data gap—information the suppliers had, but they didn’t—and sought solutions that would create transparency and proactively streamline those key partnerships.
As our panel shared more of their common challenges, we wanted to highlight other key takeaways from our discussion:
These insightful online forums, as well as our ongoing conversations with best-of-breed retailers and CPGs, tell us that the challenges of past two years have only sped up an evolution of sales forecasting into demand forecasting. This means leveraging advanced AI-powered data modeling to de-risk multiple touchpoints—from supply and inventory capacities through retail seasonality and customer spending patterns—to achieve an optimized overall ROI.