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: Katanamrp.com
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