For the first 10 years of my career in inventory management and replenishment I was referred to in the industry as a Buyer. I didn’t think much about the label then, but now I think most people in the position of managing inventory and replenishment are much more than that.
Retail and Wholesale distribution companies are faced with increasing competition and challenges from today’s economy and could take some advice from their local real estate investor: A good investor makes money when you buy, not just when you sell.
As these companies know, the first place profit margins often begin to suffer when competition is increasing is on the sell side. In this type of environment finding additional profits on this side of the business can be like getting blood from a turnip.
However, informed companies have started focusing on the opposite end of the supply chain to help drive profitability. They have come to appreciate the need for smart investment buying and are becoming increasingly more successful for it.
Having a Successful Investment Team
Companies that are focused and committed on investing for profit must allocate and devote the proper amount of time to the purchasing organization. Their focus must be creating the proper culture and expertise within the group. Promoting creativity and flexibility when approaching or considering opportunities.
Today’s successful companies have the proper structure to drive the buying process more intelligently. The investment team needs to be aligned so everyone is on the same page and working toward the same objectives. To achieve positive results, communication is imperative and must exist throughout the organization.
The Right Solution is an Investors Best Friend
Once the structure is in place, companies need to ensure these resources have the appropriate systems and tools available to support the investing functions.
It’s vital that the key technology decision makers recognize and appreciate the difference in advanced replenishment systems whether it’s on the wholesale or retail side of the supply chain. An inventory optimization solution designed to emphasize the buy side opportunities can result in increased profit and other benefits such as improved customer satisfaction, increased sales and expanded market share.
How much buy side profit are you missing because your current technology solution cannot handle your opportunities?