Buyers, however, are not privy to this inventory data, which contributes to the notion of an "everything shortage" and adds considerable frustration to holiday shopping. More likely than not, they are using a large ERP solution to manage the complete supply chain process, including inventory management. Almost all manufacturing and distribution companies already document their inventory levels. However, enterprises can break the problem into small pieces and approach it incrementally. It could also help unclog the flow of goods and ease supply chain planning processes behind the scenes.ĭuring the holidays, it may seem there's not much time to deliver inventory visibility across the supply chain. For instance, retailers could let the average American buyer see the inventory levels of a particular product type so they could make an educated decision and select their purchases based on delivery dates both for in-store or online purchases.įrom a supply chain perspective, this strategy could help move excessive inventory for any one product more efficiently, allowing levels to be better maintained across a variety of merchandise types. Most large enterprises use ERP systems that maintain inventory data, and they could leverage this information to provide public visibility into their inventory levels. While supply-and-demand experts are focused on solving this problem globally, a big question is what retailers, transportation and logistics providers and local manufacturers can do to ease the effects of this problem now. According to the National Retail Federation, this is a viable trend that will continue, resulting in the "highest holiday retail sales on record" in 2021. If imports have increased and inventory is at a low point, then one plausible conclusion is Americans are buying more than usual. To my surprise, however, our imports in August increased by $4 billion, up 1.4% over July, and our average imports increased by $3.2 billion over a three-month moving average. If inventory levels are dipping, the assumption is we're importing less than normal. Inventory levels are lower than normal - actually the lowest point in the last 10 years. Census report from October 15 shows that the inventory-to-sales ratio was recently at 1.26 (down from 1.35 the year before) based on seasonally adjusted data. After some due diligence, I determined the problem may be different from what it seems.
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