How to Control Overstocks With Inventory Forecasting
Strong sales and profits are the result of having the right product mix and level of inventory. Achieving this ideal mix requires having current and accurate inventory information. Manual processes not only take time, causing delays in producing current and accurate inventory information, but also increase the likelihood of errors. These delays and errors are likely to cause lost revenue due to inventory overstocks, understocks and out-of-stocks. Automating inventory processes not only speeds the time to produce accurate inventory information but, if forecasting is automated, it can also help to predict the inventory needed before orders are placed. Inventory forecasting can also be used to manage a chain’s existing inventory, discovering and moving overstocked inventory to under or out-of-stock locations. This decreases the risk of spoilage, returns and promotions.
3 Ways Overstocks Impact Store’s Profits
- It ties up cash in under-performing inventory, making it more difficult to invest in repairs, equipment and/or higher-performing inventory items
- It decreases margins, profits and cash flow as managers resort to promotions to liquidate overstocked inventory and avoid spoilage
- It increases the risk of theft and decreases the ability to track inventory as shelves become overstocked
How to Use Inventory Forecasting Features to Manage Overstocks
Manage overstocked, understocked and out-of-stock inventory by leveraging forecasting tools. The following example will take you through the practical steps to discover and move overstocked items using CStoreOffice®, a cloud-based back-office software solution that can help manage and forecast inventory.
Discovering Overstocked Items
STEP 1 Navigate to Petrosoft’s C-Store Office and select a store location.
STEP 2 Navigate to and select the Store Inventory report, which forecasts a store’s overstocks over the next two and four week period. It also summarizes a store’s out-of-stocks, inventory levels, stock movement and stock movement trends.
STEP 3 Once the report loads, apply the item tag Category and hit refresh.
STEP 4 Navigate down to the Overstocks chart and select the Snacks bar, which will open the Overstock Items report for that category.
STEP 5 Review the Snacks category Overstock Items report for the amount on hand over the next two and four weeks.
Transferring Overstocked Items
STEP 1 Navigate to the Pricebook reports from the main CStoreOffice® Reports drop-down menu.
STEP 2 Navigate to and select the Item Movement report.
STEP 3 Once the report loads, enter the item’s UPC, select all the stations (stores) and select find.
STEP 4 Once the report loads, move down the page to the Sales table. Since the UPC is considered a fast moving item at the Uniontown store location and is understocked, the overstocked inventory can be moved to this location.
STEP 5 Record the transfer by navigating to Vendors –> Bills and select Store Purchases. Navigate to Inventory Transfer, which is found under Related Information at the bottom of the screen. Enter the transfer information and save.Navigate to the Inventory Transfer report if you wish to view this entry.
A Final Thought
Routinely reviewing these reports through CStoreOffice® can help optimize inventory, paint an accurate picture of a store and chains inventory, keep margins and profits healthy and make the transfer of an item from one store to another simple. Discover more about how Petrosoft’s cloud-based back-office solutions help manage inventory. Discover additional inventory optimization tips.