Thanks for joining us

Follow up to Inventory Management

Thank you so much for joining us last week for our Meetup on Inventory management during COVID-19.

Our panelists

Chris Jacobs: Customer Success Lead at Katana

Chris Jacobs is the Head of Customer Success at Katana MRP, which is an Inventory and Production management software for scaling D2C manufacturing businesses selling online. He previously worked in Pipedrive (Sales CRM software) and also previously owned a direct to consumer brand manufacturing company making products for the extreme sports industry.

Jason Stuckey: GM, North America at Linnworks

With over 10+ years experience in digital branding/marketing, ecommerce strategy, and back office operations, Jason Stuckey has been on the front lines of some of the biggest movements in retail. He has helped launch more than 12 high-profile online businesses with celebrities and influencers such as Kate Hudson, Michael B. Jordan, and Rihanna. As the General Manager at Linnworks, he is focused on delivering a Total Commerce solution to Brands and Retailers looking to thrive in a multichannel world.

Josh Bartel: Co-Founder & CEO at Hydrian

Josh is the co-founder and CEO of Hydrian. He has successfully managed large teams in order fulfillment, inventory planning, and sales operations for McMaster-Carr and other distributors at the multi-billion dollar scale. He is the co-founder and former CEO of Sanitopia, an e-commerce company catering to home healthcare professionals. Josh graduated from Stanford University.

Cat Fogarty-Nyman: Founder at eCatalyst

Cat Fogarty Nyman has worked with hundreds of eCommerce brands over the last several years from start ups to established brands. She gives her clients a crystal ball into their business allowing them to understand the true impact of proposed changes on performance and cash flow. She has an extensive background in automating back office processes and managing remote teams.

Mark Lupton: Partner & Fractional CFO/COO at Amplify

Mark Lupton is Partner & Fractional CFO/COO at Amplify. He helps small businesses find hidden profits and avoid cash flow problems. Mark also serves as co-host of the Austin Shopify Meetup (1000+ members). He holds an MBA in entrepreneurship and engineering bachelor’s degree.

Discussion notes

How has this change impacted other businesses?

Chris Jacobs:
  • Digitally transforming and moving online is an essential strategy for survival for small manufacturers

  • Global supply chains experience shortages with suppliers and unpredictable lead times, and forces companies to make pivots in what products they offer, or scale down what products they make.

    • We see a rise in the localization (and in-sourcing) of the small manufacturers who now have less competition against big business, more flexibility, and enormous increases in demand from the direct to consumer markets.

    • Allowing small businesses to take away sales from global corporations reliant on supply chains

  • Pivoting: apparel companies now making face masks, and Distilleries now manufacturing hand Sanitizers

Jason Stuckey:
  • Ecommerce has gone both ways

    • Luxury goods have struggled as funds tighten

    • Brands who pivot have seen increases across the board -- not just on their new items such as PPE

    • 60% of people have said that they are fundamentally changing the way they shop

  • Brick and mortar have been devastated

    • Silver lining: COVID has given them the opportunity to retool towards the new way of commerce which is the direction we were headed anyway

Josh Bartel:
  • Clients with brick and mortar and ecommerce have dramatically shifted online

    • 3 year trend in 3 months

  • Businesses with a drop in sales see an increase in inventory

    • Work with your vendors to get better terms

  • People who have boomed had supply crunches and were missing out on sales

Cat Fogarty-Nyman:
  • We have to think holistically about inventory management

    • Are we still covering advertising and overhead?

  • Production hasn’t been as tampered as delivery

    • Longer lead times means longer cash cycles which mean tighter cash crunches

  • You don’t want to do steep discounts so look in other places for cash

    • Financing from EIDL is so cheap that it makes sense to take it

What does “good” inventory management mean now?

Chris Jacobs:
  • Systems:

    • Integrated inventory management that gives you a live wholistic picture

      • One system that links sales, manufacturing, inventory and purchasing

  • Business:

    • Customers get their products fast

    • Don’t have too much cash tied up in inventory

    • You need to have a plan

Jason Stuckey:
  • Consumers expect to shop where they want to shop (Amazon, facebook, instagram, google, walmart ect)

    • Diversifying where you sell your product so it gets in front of your customer and making sure that inventory is connected to that is essential

    • The different channels are launching marketplaces

  • As a seller you need to have a handle on the inventory that you’re ordering

    • Find ways to unlock it and be creative with bundles

  • There is no set it and let it go with any of the tech platforms that you have

Josh Bartel:
  • Vendor communication is key!

  • For sales that are down reach out to vendors and ask for changes or cancelations

  • You need to be on top of forecasting and doing it more frequently

    • Your forecast should be informed by lead times

  • If you sell apparel there is very little profit left in selling n95 masks -- demand has died off

Cat Fogarty-Nyman:
  • Good inventory management means you are tracking the full cost of every item purchased and sold

    • Cost of goods

    • Shipping & duties

    • Marketing

    • Packaging

    • Print materials

  • Make sure you are making adjustments at least quarterly to make sure you are spending efficiently

What Should I be tracking now?

Chris Jacobs:
  • Sales:

    • Which products are performing and which are not

    • Cut the products that don’t sell

  • Operations:

    • Understand the cost of scarce resources you are purchasing

  • Increase the frequency of checking both

Jason Stuckey:
  • You need to be focusing on your brand and value prop

    • Define your Brand - Brand = Power

    • Build a strategy

      • Pick the right channels over spreading across all channels

      • Focus on new net growth

      • Elevate the customer experience in the channel

      • Authenticity matters

    • Build operational capacity

      • Build capacity by automating

      • Deliver on customer expectations

Josh Bartel:
  • Update your sales forecast and target inventory weekly

Cat Fogarty-Nyman:
  • Total inventory on hand

  • Total vendor deposits

  • Total inventory in transit

  • Work in progress

How should my ordering process change?

Chris Jacobs:
  • Demand based ordering

  • Having a number of suppliers for the same products diversifies your risk.

  • Continually seeking out efficiency in your supply chain

Jason Stuckey:
  • Self test your ordering system through delivery/return to find inefficiencies

    • Automate out inefficiencies

  • Focus on good leadership and find little wins

Josh Bartel:
  • Increase order frequency with smaller quantities

  • Manually adjust lead times in your systems

Cat Fogarty-Nyman:
  • You should be scenario planning

    • How is COVID going to impact the demand for my product?

    • Build a 6-12 month forecast

      • Use three scenarios (Bronze, Silver, Gold)

How Do I know if my systems are off?

Chris Jacobs:
  • You have to delay customer orders

  • You have large pile ups of inventory

Jason Stuckey:
  • You need the combination of humans + tools to ensure you have process integrity

    • You need data quality assurance as well as product quality assurance

Josh Bartel:
  • There are two big risks right now:

    • Recent sales are not indicative of future sales

    • Lead times that are delayed are not indicative of future lead times skewing ordering requirements

  • If there is excess inventory

    • Increase price

Cat Fogarty-Nyman:
  • You need to be reviewing your Gross Profit Margin

    • If it varies wildly it is usually a sign of poor inventory management

What are some good systems options for me?

Chris Jacobs:
  • If you are manufacturing:

Jason Stuckey:
  • Every business is unique and there are no systems that can do it all

  • Outline the 3-5 must haves and stack the rest on a “nice-to-have” list

  • Find one that hits your must haves and fits your growth profile

Cat Fogarty-Nyman:
  • Partial to Dear and Cin7

  • Before you move to a software:

    • What are your needs now?

    • What will your needs be in 3 years?

  • Brace yourself for the time and effort it takes to move to a new system

  • An important part of inventory management is where it is stored -- make sure it is the appropriate space

  • Vet your different options

  • Revenue is vanity, profit is sanity, cash is reality