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Tag: inventory

  • Inventory Accuracy and the Cost of Getting It Wrong

    Inventory Accuracy and the Cost of Getting It Wrong

    In Southeast Asia, retail has become faster, more mobile and more fragmented than ever before. Consumers move between marketplaces, brand sites, social platforms and physical stores with ease. They expect products to be available where and when they choose to buy, even as retailers contend with increasingly complex supply chains, shifting trade conditions and unexpected disruptions.

    For retailers, this means there is less room for error than ever before. Across the region, one of the most common causes of friction in retail experiences is uncertainty around product availability. That could be products that show as in stock but aren’t, orders that go through and then fall over, or delivery dates that change once the purchase is complete. These issues may sit behind the scenes, but customers read them as a measure of trust.

    Inventory accuracy has quietly become a trust issue

    Many retailers still operate with inventory systems that were not designed for today’s level of complexity. Stock is spread across distribution centres, stores, third-party logistics providers and, increasingly, cross-border locations. Sales are driven by flash promotions, livestream events and marketplace campaigns that can create sudden demand spikes.

    When inventory data is delayed, siloed or manually reconciled, retailers are forced to make assumptions. Availability becomes an estimate rather than a fact. Without a single source of truth across the network, systems operate on outdated or incomplete information, and the gap between what is believed to be available and what physically exists grows quickly. Customers feel the impact almost immediately.

    In Southeast Asia, this challenge is amplified by scale and diversity. Retailers may be operating across multiple countries, currencies and fulfilment models at once. A single product might be available in one market but not another, or in a store but not a warehouse. Without a unified view of inventory, decisions are made in isolation, increasing the risk of errors. Over time, this erodes confidence in the retailer.

    Consumers notice when orders are cancelled after purchase. They remember when delivery dates change unexpectedly. These experiences shape where and how they choose to shop. Trust, once lost, is difficult to regain.

    The power of accurate inventory visibility

    Accurate inventory visibility changes this dynamic, but only when it is supported by systems designed to operate at retail scale. That means visibility that spans stores, distribution centres, third-party partners and cross-border locations, and updates in real time as conditions change.

    When retailers have real-time visibility across their inventory network, they can make better promises and keep them. Orders are accepted based on what is genuinely available. Fulfilment decisions reflect actual capacity across locations. Delivery commitments are set according to what can be executed, not what is hoped for.

    This becomes increasingly important as retailers expand fulfilment options. Services such as ship-from-store, click and collect and same-day delivery rely on inventory accuracy at a granular level. A single discrepancy can disrupt an entire order flow, affecting staff, customers and margins.

    Inventory accuracy also plays a direct role in managing cost. Poor visibility leads to over-stocking in some locations and shortages in others. It increases reliance on manual intervention, split shipments and expedited transport. Each workaround adds cost and complexity.

    By contrast, retailers with accurate, unified inventory data can position stock more effectively, reduce unnecessary movement and make better use of existing assets. As margins tighten, this discipline becomes increasingly important.

    From visibility to confidence

    Inventory accuracy is not a technology problem to be solved, but an operating discipline that must be supported by systems reflecting real conditions across the retail network. In Southeast Asia’s retail environment, where demand can shift quickly and conditions vary by market, this discipline becomes a competitive advantage.

    As retail continues to evolve across the region, the retailers that stand out will not be those with the most channels or the widest reach, but those that are dependable. Those that show customers what is available, deliver what they promise and avoid unnecessary friction.

    Inventory accuracy may not be visible to shoppers, but its impact is felt in every interaction. In a region built on speed and choice, trust is increasingly defined by how accurately retailers understand their inventory and how confidently they act on it.

    Written by Raghav Sibal, Vice President APAC, Manhattan Associates

    For more information please visit: https://www.manh.com/en-sg

  • H&M Closes Q4 with Soaring Profits Amid Cost Control & Inventory Efficiency, Softening Demand Forecasted

    H&M Closes Q4 with Soaring Profits Amid Cost Control & Inventory Efficiency, Softening Demand Forecasted

    Despite limited sales growth and a reduction in store counts, H&M ended the year with robust profitability and stringent cost control.

    Q4 Performance

    The fourth quarter, concluding on November 30, saw a 2 percent increase in sales. This growth was achieved despite a 4 percent reduction in store operations compared to the same period last year. The retailer’s operating profit escalated 38 percent to US$738.3 million, driving the operating margin up to 10.7 percent from 7.4 percent the previous year. The gross margin also increased to 55.9 percent. H&M attributes this successful quarter to an enhanced product offering and superior inventory productivity, even with selling and administrative expenses on the wane.

    H&M CEO Daniel Erver highlighted a strong customer offering, effective cost control, and improved inventory productivity as the main drivers of this quarter’s performance.

    Annual Results

    Over the year, H&M reported a 2 percent rise in net sales in local currencies. However, reported sales demonstrated a decline, settling at $25.7 billion. Operating profit saw a rise, reaching $2.1 billion and lifting the operating margin to 8.1 percent from the previous year’s 7.4 percent.

    Net profit also saw an increase, reaching $1.3 billion, while cash flow from operating activities grew to $3.5 billion. According to Erver, the company saw an improvement in earnings during the second half of the year, attributing it to a focus on enhancing relevance and speed across the product offering.

    Erver added, “We continue to make significant strides towards all our long-term goals despite challenging environments.”

    Future Projections

    Looking forward, H&M predicts a 2 percent decline in sales in the upcoming months in local currencies. This projection is based on a softened demand following strong Black Friday sales and a negative calendar effect due to the timing of the Chinese New Year.

    H&M also plans to expand its physical and digital presence in growth markets such as Brazil and other parts of Latin America. This expansion strategy will be complemented by an ongoing optimization of the store portfolio and increased use of artificial intelligence.

    Questions & Answers

    What were the key contributors to H&M’s fourth-quarter performance?
    The performance was primarily driven by a stronger customer offering, good cost control, and improved inventory productivity.

    What factors led to the improvement in H&M’s annual earnings?
    H&M’s annual earnings saw an improvement due to a focus on enhancing relevance and speed across the product offering.

    What is H&M’s growth strategy for the near future?
    H&M plans to expand its physical and digital presence in growth markets such as Brazil and other parts of Latin America, alongside ongoing optimization of the store portfolio and increased use of artificial intelligence.

  • Enhance Inventory Management With Satellite Pallet Racking Systems

    Enhance Inventory Management With Satellite Pallet Racking Systems

    Innovative solutions are in high demand as businesses seek to enhance efficiency and maximize storage space. Implementing efficient inventory management systems can significantly improve operational efficiency, streamline workflows, and increase profits. A revolutionary trend on the rise is using satellite pallet racking systems.   

    This article delves into the details of satellite pallet racking and explores how it can enhance inventory management. You’ll discover the benefits of these systems and the impact they can have on your business operations.   

    Understanding Satellite Pallet Racking Systems   

    In the world of warehouse management, pallet racking systems are essential. They’re the backbone of most storage environments, providing efficient use of space and easy access to products. Satellite pallet racking systems take this concept to the next level.   

    These systems use automated satellite vehicles that move along the racking system’s rails, storing and retrieving pallets as required. They function with precision, speed, and efficiency, making them a powerful asset for any warehouse.   

    Maximizing Space With Satellite Pallet Racking   

    One significant advantage of satellite pallet racking systems is their ability to maximize storage space. Traditional racking systems often leave unused space that could be utilized more effectively.   

    With satellite racking, you’ll experience space utilization like never before. The satellite vehicles operate within the racking, eliminating the need for wide aisles to accommodate forklifts. It leads to a higher storage density and better use of warehouse space.   

    In the next section, you’ll delve into these systems’ operational efficiency.   

    Boosting Operational Efficiency   

    Satellite pallet racking systems aren’t just about saving space; they also enhance operational efficiency. Human errors are significantly reduced as these automated vehicles handle most of the work. The consistency of automated operations allows for better planning and forecasting.   

    Not only do these systems save time on handling products, but they also reduce the physical demand on your staff. It can increase team member satisfaction and productivity, making your business operations more effective overall.   

    As you’ll see in the next section, satellite pallet racking systems also contribute to inventory management and control.   

    Revolutionizing Inventory Management And Control   

    Inventory management and control are crucial for all businesses, and satellite pallet racking systems provide a major leap forward. Automated operations and digital controls make inventory tracking significantly more precise.   

    Satellite vehicles are often equipped with sensors and tracking systems, offering real-time updates on your inventory. It ensures accurate inventory control, aids in preventing losses, and enhances overall business efficiency.   

    Furthermore, this level of precision and control allows for better planning and forecasting, minimizing issues with overstocking or understocking.   

    Improving Inventory Accuracy and Reducing Loss  

    The advantages of satellite pallet racking systems are manifold, and a significant aspect where they excel is in improving inventory accuracy and reducing loss, which is critical to maintaining a profitable business. Here’s how they do it: 

    • Inventory accuracy: Thanks to the automation and digitization of satellite pallet racking systems, tracking inventory becomes easier and more accurate. Each pallet’s location is tracked in real time, reducing the chances of misplacement and contributing to improved inventory accuracy.  
    • Reduced loss: The likelihood of misplaced or lost items decreases with precise tracking. It could translate into substantial savings over time, especially for businesses dealing with high-value items.  
    • Minimized damage: Using automated vehicles for storing and retrieving pallets reduces the chance of human errors that can lead to product damage. Satellite vehicles are designed to handle pallets with care, ensuring the integrity of your products.  

    The next section will focus on the environmental benefits that these systems offer.  

    Creating an Environmentally Friendly Warehouse   

    In today’s world, sustainability isn’t merely a trend; it’s a business necessity. More and more businesses are realizing the importance of implementing green practices. Not only can these efforts improve a company’s reputation, but they can also contribute to global sustainability. Satellite pallet racking systems can play a significant role in these efforts.   

    One of the ways these systems contribute to sustainability is through the efficient use of space. By maximizing space utilization, a warehouse can significantly reduce its energy consumption. It’s because less energy is required for lighting and climate control in a well-organized space.   

    Moreover, many components of satellite pallet racking systems are made from recyclable materials. It means that even when the system eventually needs to be replaced, it won’t contribute significantly to landfill waste. Instead, many of its parts can be recycled, thus further contributing to sustainability efforts.   

    Finally, automated operations and optimized logistics require fewer forklifts and other vehicles. It leads to a decrease in carbon emissions, helping to lower your business’s carbon footprint.   

    Conclusion   

    In conclusion, satellite pallet racking systems are an investment worth considering for businesses seeking to maximize storage space, boost operational efficiency, and enhance inventory control. These systems have a proven track record of driving business performance and could be the key to unlocking your warehouse’s potential.

     

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  • How To Ensure A Balance Between Inventory And Sales?

    How To Ensure A Balance Between Inventory And Sales?

    With the recession taking place, many businesses that deal with physical products are considering overstocking the items to cut higher costs in the future. However, blindly overstocking the products can expose the businesses to the changes and further mercy of the consumer behaviour. Therefore, inventory management is a crucial part of businesses right now. There is a need to maintain a perfect balance between inventory and sales.

    With inventory management, the business can increase and improve customer service, cash flow cycle, resource capacity utilisation and supply chain efficiency. Furthermore, it reduces working capital requirements and inventory loss. Listed below are few tips for proper inventory management.

    Anticipating Customer Demand Is Essential 

    Consumer demand is dynamic; it keeps changing according to the economic condition. Even though it might seem a good idea to overstock the items and ship them through Ninja Van and other prominent shipping services like Shopee Xpress, it is essential first to ensure that there will be consumer demand. Overstocking inventory can put the business at risk as the inventory value has a chance to drop, and the business will be forced to push out the stock at heavy discounts. 

    Sales forecast plays a vital role in inventory management. It is essential to conduct thorough market research and collect all the necessary data to check whether the sales will be high or low. It is only through this information that it is possible to create the perfect inventory balance. 

    Identify The Risk Inventory And Get Rid Of It 

    Even though inventory acts like a shock absorber, it is critical to identify the risk inventory and eliminate it for its proper functioning. Identifying the risk inventory enables the business to reduce the cost of inventory management. Dead and obsolete inventory should be removed to ensure that the businesses have more cash on hand. 

    Alignment Between Sales And Stock

    When you keep the sales and stock levels in alignment, it is possible to ensure that you do not undertake or overstock the inventory. Keep real-time stock level data and adjust it whenever a transaction happens. There are plenty of tools out there that provide good recommendations about the items that need restocking. Further, keep the past trend in check to predict what you can consider in the future by considering the necessary variables. 

    Analyse Supplier Performance 

    A reliable supplier makes it easy to take care of the stock whenever it is required. On the other hand, an unreliable supplier can create plenty of problems. Keep the supplier’s performance in check and ensure that they are reliable. Further, the businesses should switch if the supplier is unreliable. Not only a reliable supplier is vital, but it is also essential to ensure that it provides the stock at competitive pricing. 

    Keep 80/20 Inventory Rule In Mind 

    The items that fetch the most money for a business should always stay in stock. In business, 80% of the company’s profits come from 20% of the stock. A business should identify this 20% of the stock and prioritise them in the inventory. Further, a complete understanding of the sales lifecycle of these items is important. Developing this understanding is possible when these products are closely monitored. 

    Track Sales And Understand The Pattern 

    During tough times, like the current recession, tracking sales daily is essential. Further, not only tracking the sales is important, but it is also crucial to understand the underlying pattern of the sales too. Analysing the sales data will shed light on the bestselling products and, further, identify the seasonal trend too. It will give the business the understanding that is required to restock the inventory at the right amount. 

    Inventory management might look tough, but it is not always tough with the right analysis and understanding. Keeping a tab on the inventory-to-sales ratio is vital to ensure that the inventory management is doing okay. Most of the time, the amount of inventory that needs to be kept is guesswork. However, it is possible to make intelligent guesswork with the right tool. 

    During the recession, taking inventory management seriously is extremely important. The items should neither be overstock nor understock. With proper planning, analysis and work, it is possible to engage in efficient inventory management that can ensure business profit even during tough times. 

     

  • Le Saunda turns a profit but faces inventory challenge

    Le Saunda turns a profit but faces inventory challenge

    Shoe retailer Le Saunda is planning to boost its on-sale activity as it battles to reduce its inventory in the wake of falling sales.

    But the company has returned to profitability despite tightened margins in the first half year.

    The company’s sales fell by 18.2 per cent to RMB376.7 million (US$53.5 million) in the six months to August and gross profit fell 16.9 per cent to RMB241.2 million ($34.3 million). Profit attributable to shareholders was RMB2.4 million ($341,000) compared to a loss in the same period last year of RMB9.6 million ($1.36 million).

    Chairman James Ngai said that given the current “gloomy economic conditions” Le Saunda will continue to optimise its distribution network, close down low-profit stores and take “a cautious and prudent approach in business expansion”.

    “It is expected that the group will have a relatively high inventory level for a certain period of time. To maintain a good cash flow condition, the group will boost its sales in the second half of the year. As a result, the group’s gross profit margin and net profit margin will be affected,” he said.

    In the six months to August, the group achieved a gross profit margin of 64 per cent, representing a 0.9-percentage-point improvement year on year.

    That was achieved despite reducing inventory by about 7 per cent, however inventory turnover increased by 58 days to 378 days. Ngai says the group will be focusing on controlling the age of its inventory. As of August 31 about 75 per cent of finished goods had an age of less than one year.

    During the period, same-store sales of Le Saunda shops in Mainland China improved by 3.7 per cent, but the top-line decline was caused by the closure of about 150 outlets.

    In Hong Kong, sales fell 35 per cent as protests caused stores to temporarily shutter and mainland tourists stayed away. The company closed one store during the half year, leaving it with nine in Hong Kong and Macau.

    “The protest activities in Hong Kong are expected to carry on in the short term and it is inevitable that the economy will enter a recession. The group will closely monitor market conditions and strive for better performance in a prudent and pragmatic manner,” said Ngai.

    Online sales fell by 22.6 per cent as the market became increasingly fragmented due to new players launching and consumers increasingly shopping on alternative e-commerce channels such as apps.

    “Facing the market challenges, the group is developing multichannel operations, exploring new resources on e-commerce platforms and continuously improving supply chain efficiency,” he said.

    Le Saunda’s major proprietary brands include Le Saunda, Le Saunda Men, Linea Rosa, Pitti Donna and CNE.

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  • Sugar inventory hits record high

    Sugar inventory hits record high

    Sugar plants have reported their highest ever inventory level, nearing 750,000 tons, accounting for 50 percent of their processing output. Explaining reasons for the high inventory yesterday, chairman of Vietnam Sugar and Sugarcane Association (VSSA) Pham Quoc Doanh said that unusual weather has caused material shortage at the beginning of this year processing crop. Sugarcane harvest has concentrated at the end of the crop.

    Sugar import quotas, as per WTO commitments, left  from last year has contributed to the inventory this year.  Illicit sugar import has reached 400,000 tons now accounting for one third of the total processing output.

    Mr. Nguyen Hoang Ngoan, deputy director general of Can Tho Sugar Company, said that Thai sugar has illegally imported into the Mekong Delta, the central region and the Central Highlands and been sold at lower than domestic prices.

    A kilogram of domestic sugar is priced as low as VND16,000-16,500 a kilogram but it is still unsalable. The company alone has over 20,000 tons in stock.

    Stating at a conference seeking  sugar consumption solutions recently, deputy Minister of Agriculture and Rural Development Tran Thanh Nam said that the ministry had proposed the Ministry of Industry and Trade to lengthen sugar import under quotas to the third and fourth quarter.

    The Ministry of Industry and Trade and the Ministry of Finance should rectify long lasting sugar auction to prevent loopholes for invoice fraudulence.

    In long term, the ministry proposed to increase sugarcane productivity and commercial cane sugar (CCS), representing the sugar content of cane, and regulate sugar volume in production and consumption.

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  • Learn 7 Steps To Increase The Accuracy Of Easier Physical Inventory Counts

    Learn 7 Steps To Increase The Accuracy Of Easier Physical Inventory Counts

    Easier physical inventory counts matter and can make a big difference to controlling and maintaining your business. Learn these seven steps in improve accuracy.

    1) Prioritize Inventory Accuracy Over Order Fulfilment:

    In terms of inventory accuracy, prioritizing accuracy over all other factors is the most essential yet challenging step. Quite a few inventory issues come up when someone feels like they need to push a transaction through whatever system is used while intending to return to the numbers to fix them later. Emergency rushing does often mean that people forget to come back and fix it later though. Missed production entries and negative inventory lines join a broad array of problems that result from this. Only when you put systems into place that keep employees from proceeding with a rushed transaction are you able to keep accurate and effective inventory records.

    One instance of success that can be learned from is a team that recently instituted an accounting change. It prevented any shipment from being processed if it claimed to have more inventory than the system actually knew was on hand. For instance, if the team was trying to ship 12 units of an item, but the system saw only 6 in stock, then an alert would show up, forcing the staff to fix the issue before they could move ahead. That change helped the team deal with issues prior to the product units going out. By forcing the team to deal on the spot with missed production entries prior to shipments going out, the newly altered system helped them avoid their biggest inventory issues. 

    2) Everything Gets A Marked Location:

    When the time comes that inventory must be counted, it’s necessary that everything has its own labelled home. Stray pallets and homeless loose boxes wind up haunting you when it’s time to reconcile things. Even new and temporarily locations for the duration of the inventory can make life a lot easier, so find a defined location for all items, mark it well, store it there, and then leave it.

    3) Reduce Your Inventory As Much As You Can:

    Do everything you can to wind up counting as little actual inventory as possible. That might mean stalling an in-bound shipment for a few days, or shipping extra units prior to doing the counting. When you have to count less, you have less opportunity for mistakes. You also want to avoid receiving or shipping any of your product during your count, since this will mean discrepancies.

    4) Count Overstock Items In Advance:

    Even before you start the official count, you can have individuals count the locations of overstock in advance. That reduces how much counting has to happen on the actual days where inventory is fully frozen. Make sure the spots are stocked fully and then wrap them, marking down the counts of the locations. Just be sure that counts are adjusted to reflect anything taken from overstock between the pre-count and the actual inventory. If you do a full inventory count it should be scheduled well ahead of time.

    5) Do Visual Count Tracking:

    Your inventory is probably going to take more than one person. That being said, knowing what has been counted and what is still waiting can get gruesomely complex. To keep things simple, make it very easy to know what was counted. Use large count tags that have bright colors as unmistakable signs of what has already been tagged. Go big and obvious, especially is you are going to use anyone not familiar with the environment. Have a second style of tag for anything that is not going to get counted at all.

    6) Give Every Team A Product Specialist:

    Something else that causes confusion is how items are packed. If an assortment of 12 items is packed as one, is it a dozen units or 1 case? Box markings give clues, but it’s better to have a member of each team be familiar with the product in question. You might need to bring in extra hands for a quick inventory, and they need to know who to turn to for questions in their group. If possible, partner experienced people with newer individuals.

    7) Immaterial Counts Should Happen Quickly:

    A number of smaller items just aren’t worth counting out individually. This can be things like gallons of chemicals, plastic hooks and bags, or tons of grains. In cases like these, physical measurements and counting, just aren’t worth it in establishing product value. Sensitive scales help out in copious quantities of small items, so weigh a sample and then do calculations on the larger supply. This works especially well for cheaper components. Larger quantities can be estimated and calculated through extrapolation, which is better than just doing guesswork.

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  • Levi’s exec says eCommerce forcing focus on inventories

    Levi’s exec says eCommerce forcing focus on inventories

    Retailers can no longer accept a lack of shelf level inventory in-stocks and inaccurate inventories, according to Carrie Ask, executive VP and president of global retail at Levi Strauss & Co.

    Speaking at this month’s NRF Big Show in New York, Ask said that after travelling the world and observing consumers purchasing intent and behaviour in-store, the 164 year old brand’s executive team had an ‘a-ha’ moment.

    “Now while store traffic is declining, we discovered something else, something that we think is fundamentally different about store traffic today,” she said.

    “We discovered the purchase intent of consumers visiting stores, is rising. Makes sense, they don’t have to go to a store anymore, so when they do, their intention is higher.

    “In addition, we found that ‘out of stock’ and ‘couldn’t find my item’ are the top barriers to purchase for consumers that plan to make a purchase, as well as consumers who purchase but didn’t get everything they wanted.”

    Ask said the opportunity and stakes are now higher than ever for physical retailers. On the opportunity side, Ask said Levi’s were underestimating the potential within its store traffic to drive sales and conversion. And on the stakes side, the clothing brand also realised that when out of stock, the opportunity to drive a planned or impulse purchase is removed, resulting in frustrated and disappointed consumers that may decide their next trip, time and energy wasn’t worth it – potentially jeopardising future traffic.

    “In-store inventory insights, specifically shelf level instocks and accurate inventories are an age old problem for retail,” said Ask.

    “While we’ve had inventory management and planning systems for some time but typically limited to telling us whether an item is in the store but not whether it’s on the sales floor in its designated location on the sales floor.”

    In addition, Ask said instore inventory is often inaccurate, with sales associates in-store stock checks using radio or POS often culminating in coming back empty handed, not able to find products ‘even though the system said there was one.’

    “The truth is, full stop, this happens all the time and as a retailer and an industry, we can no longer accept this lack of shelf level inventory instocks and inaccurate inventories, which are an Achilles heel for us.

    “In the bad old days the consumer didn’t have very many choices and they could either keep looking and keep shopping, maybe go to a competitor or they had to settle for a substitute item, waiting for it to come back in-stock or to go without but consumers don’t have to settle anymore.”

    Levi’s is trialling technology from Intel in its stores, including the RFID tagging of all products and ceiling mounted sensors, trigger replenishment actions and get staff away from focusing on inventory management and back onto its consumers.

    “The goal is real-time, all the time, inventory insights, which brings several benefits,” said Ask. “It also gives our planning and allocation teams more accurate information to guide inventory decisions.”

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