The consumer frustration: Lack of availability.
The consumer frustration: Lack of availability.
Went to buy and it’s out of stock
Recently, we visited a store of a telecommunications service provider that sells smartphones to its customers. When requesting a contract renewal and a phone upgrade, the sales representative informed us that the requested smartphone was out of stock. When we asked for alternative options, his response was the same—no availability. Other customers were also complaining about the same issue and threatened to switch providers because of this.
In another experience, we took a car to the service workshop of a local dealership of a well-known brand. After an initial diagnosis, the service advisor informed us that a part was needed for the repair, and it would take three months for the part to arrive, meaning we’d have to wait that long with the car immobilized.
Similar stories happen every day in countless companies across various industries, from supermarkets, car dealerships, hardware stores, restaurants, pharmacies, and more. The dissatisfaction this creates in customers is immense. Many, due to the recurrence of these events in some businesses, prefer to switch providers or places to shop. Nothing affects a company’s sales more than poor product availability, and if these products are the customers’ favorites, the negative impact multiplies. The level of service within a company’s supply chain, all the way to the final consumer, is a key element of organizational success.
What’s worrying is that many companies failing in their service levels actually have excess inventory. This creates a lot of uncertainty—on one hand, a large amount of capital was invested to ensure product availability when customers need it, but on the other, a significant portion of that capital ends up being unproductive. What went wrong?
Went to buy and it’s out of stock
Recently, we visited a store of a telecommunications service provider that sells smartphones to its customers. When requesting a contract renewal and a phone upgrade, the sales representative informed us that the requested smartphone was out of stock. When we asked for alternative options, his response was the same—no availability. Other customers were also complaining about the same issue and threatened to switch providers because of this.
In another experience, we took a car to the service workshop of a local dealership of a well-known brand. After an initial diagnosis, the service advisor informed us that a part was needed for the repair, and it would take three months for the part to arrive, meaning we’d have to wait that long with the car immobilized.
Similar stories happen every day in countless companies across various industries, from supermarkets, car dealerships, hardware stores, restaurants, pharmacies, and more. The dissatisfaction this creates in customers is immense. Many, due to the recurrence of these events in some businesses, prefer to switch providers or places to shop. Nothing affects a company’s sales more than poor product availability, and if these products are the customers’ favorites, the negative impact multiplies. The level of service within a company’s supply chain, all the way to the final consumer, is a key element of organizational success.
What’s worrying is that many companies failing in their service levels actually have excess inventory. This creates a lot of uncertainty—on one hand, a large amount of capital was invested to ensure product availability when customers need it, but on the other, a significant portion of that capital ends up being unproductive. What went wrong?
The cause of these situations lies in poor inventory management and purchasing management. These activities are influenced by many factors, some controllable and others highly unpredictable, such as product demand. Predicting demand is a complex task because it is a random variable, meaning it has many unknown and random components that affect its accurate prediction. Another factor is the level of supplier compliance regarding quantities and delivery times, the season, the purchasing method, and the distribution model, among others.
If companies do not prioritize their purchasing processes and inventory management, they will undoubtedly affect product availability, customer satisfaction and loyalty, as well as sales, eroding their ability to grow sustainably.
To be successful in many businesses, you must buy well to sell better, and that means having proven technological systems and tools that allow the key players in these processes to configure the ideal scenarios for inventory management—striking the perfect balance between excellent availability and an adequate inventory without excess, ensuring maximum productivity from the investment made in it.
To the great satisfaction of the ATAsoft team, creators of Nash, an intelligent replenishment and inventory management software, this solution has helped companies using it improve their availability and inventory management indicators. In some cases, due to its performance, they’ve seen sales increase by over 70%, without increasing inventory, thanks to a significant improvement in availability and customer satisfaction. Nash not only generates the ideal orders but also backs them up with intelligent analytical reports and provides multiple customization features for purchasing methods, distribution systems, and inventory stratification to improve availability and maximize performance.
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Autor: Alejandro Sarabia.
© diciembre 19, 2024 • DEVAICO By ATAsoft. S.A. •
