Direct Tech Inc.

A highlight of my year is the annual Direct Tech (now SPI) User Conference. (SPI acquired Direct Tech earlier this year.) This event brings together SPI clients for three days to network with their peers, learn more about SPI software applications and services, and discuss best practices related to merchandise and inventory planning. This year’s…

Direct retailing has always been about adapting new media to market from a distance. Whether the medium is door-to-door selling, newspaper and magazine advertisements, mail order fliers, 300-page catalogs, specialty catalogs, infomercials, or e-commerce, direct retailing has always been about selling products to consumers from a distance. The format of the message and the speed of communications certainly change, but the fundamental process of selling products to consumers remains.

The sharp increase in November and December sales makes inventory planning and scheduling an extreme challenge for cross-channel retailers. The combination of increased sales, long vendor lead times, inherent forecasting challenges and limited cash availability create a “perfect storm” of inventory management opportunities.

From an inventory management perspective, the fourth quarter holiday season creates a perfect storm of challenges: extremely high demand, a short selling season coupled with long vendor lead times, limited cash available to support increased inventory requirements, a bloated freight system, and inventory handling dependent upon over-stretched distribution center staff.

In a session we co-presented at the recent National Conference on Operations & Fulfillment in Las Vegas, we led a panel that delivered the following top five inventory planning best practices:

It’s a problem as fundamental as supply and demand: When supply fails to meet demand, you have to back-order. When supply exceeds demand, you have overstock. When it all works according to plan, pinch yourself; you may be dreaming. Or, you may be one of the smart multichannel marketers who bucks business as usual to adopt a more realistic approach to the planning and purchasing of product. An approach called “continuous inventory” yields several benefits: • more predictable demand streams; • more accurate inventory levels; • special vendor pricing; • optimized shipping; and • improved customer experiences. The best part about continuous inventory