Benefits of Frequent Supply to our stores

Imagine a manufacturer producing a variety of products. These products are then sold through stores which are serviced by a few warehouses. 

Usually, the retailer will order an entire season’s supply of an item. The retailer will want the items to arrive before the season begins based on a forecast of what sales may be.

But, forecasts are always wrong. 
So the retailer usually runs out of stock before the season ends or has excess stock left at the end of the season. The excess stock will sell at reduced prices. 

Besides, there is the problem of storing that inventory during the season. 

The solution: 
First, begin with a plan to deliver during the season. 
How much to deliver? An amount equal to actual sales during the previous delivery period. 

At the start of the season, the retailer should have lesser inventory. How much? Only that much inventory as much is likely during the replenishment period. 
The regional warehouses will hold some stock. But most stock will be in a central warehouse at the manufacturer. 

We enjoy the fact that variation is much smaller at the manufacturer than it is at the typical retailer. 

Now, there is less stock in the system. Also, because of frequent deliveries, availability of the item at the store increases. 

Are you worried about increase in transportation cost for more deliveries? The Increase in profit is much bigger than any increase in the transportation costs.

Some simple changes can increase your profitability multifold.