I have noticed that some retail or direct selling companies have an extra challenge when it comes to planning inventories. That's because they end up having to add extra inventory to meet business or marketing needs, and this volume is often considered outside of the normal planning process.
The planogram is an example of what I'm talking about in the case of physical stores. Planogram is a product, assortment or category positioning plan on gondolas, shelves, exhibitors, etc. It may happen that the planogram presents a need for more stock than planned for that store to complete an exhibitor or build a pyramid of products, for example. When this need is not planned in advance, it can cause difficulties in supplying stores. Consultant Fernando Chalréo has already written about the subject and addressed the problem of markets that buy more products than they sell in order to maintain constant good looks on shelves.
Another example is the demo items present in the sale of surgical products. In many cases, the surgeon does not know which SKU he will use until the moment of surgery, needing to have some product options on hand. Therefore, even if only one item is consumed, it is necessary to have alternative items in stock, as it is not known in advance which one will be used in the end. In this case, the challenge is even greater, as in addition to needing extra stock, there is a need for reverse logistics for demonstration items that have not been used and that will replenish the available stock.
A couple of years ago, I wrote an article about the 5 functions of inventories and how important it is to be aware of them in order to have a well-balanced inventory: 1. Cycle Stock, 2. Safety Stock, 3. In-Transit Stock, 4. Buffer Stock and 5. Speculative Stock. Since then, I've been thinking about adding a sixth function to the list: Trading Inventory.
Commercial Inventory would be that inventory needed to meet sales requirements. It can be of several types, planogram and demonstration are just a few examples. Can you think of other cases? I understand that calculating the need for this stock is a great challenge, as it involves decisions by areas of the company that are greatly influenced by short-term demand. The way to plan it will depend on its nature, but one thing is certain: it is necessary to consider it in the plans so that there is no excess or rupture due to lack of planning.
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Beatris Huber
https://ilos.com.brManaging Partner of ILOS, Master in Business Administration from COPPEAD/UFRJ with extension at the European Business School – EBS, Germany and Business Administration from UFRJ. More than 10 years of experience in training and consulting projects, focusing on Logistics and Supply Chain. In the training area, he developed company games and online courses and today teaches classes in Data Analysis, Inventory Management, Warehousing Management, in addition to applying business games such as Beer Game in open and in-company programs in companies from different segments, such as Coca -Cola, Nestlé, ThyssenKrupp, Votorantim, Carrefour, Mallinkrodt, Souza Cruz, Via Varejo, Monsanto, Itaú, Renner, Ipiranga, among others. In consultancy, he carried out projects such as Redefinition of the Logistics Network, Inventory Management, S&OP Process Structuring and Diagnosis of Storage and Transport Operations in companies such as Coca-Cola, Souza Cruz, Editora Moderna, Petrobras, Ducoco, Ultragaz, Silimed, Eudora among others.
