The 2020 Mid-Year Economic Update_long

Tip: To Keep Customer Service High, Have a Methodical Inventory Plan

Forecasting can be a challenge if distributors include too much information.

To maintain a high level of customer service when cutting back inventory during a market downturn, make sure to have a clear, methodical plan. Slashing inventory without a plan is one mistake many distributors make when they need to reduce inventory, says Jon Schreibfeder in Inventory Reductions On Tap.

One element many distributors struggle with is forecasting. "People are still using models that take into account six, seven, eight months of history," Schreibfeder says. Instead, include just the past three months, taking an average and considering trends.

Alongside forecasting, a distributor must consider how to adapt their replenishment models. One model does not always fit all, but when slashing inventory it can be smart to use a replenishment model.

And when demand does bounce back the short-term forecasting model is adequate for the beginning of an upturn, Schreibfeder says. When the recovery is in full swing, distributors can revert to their pre-downturn forecasting methods.

About the Author
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

By subscribing, you are agreeing to MDM’s Privacy Policy.

0

articles left

This is your last free article

Subscribe to MDM Premium today and get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.