Stockout situations for an online business are embarrassing resulting in loss of customers as well as the loss of brand value. This is where the concept of Dynamic Safety Stock Management comes into play. Safety stock, as can be understood from the term, refers to the excess stock of products, say, best-selling products, or seasonal in-demand products that a business over-stocks with the purpose of using in case of over-demand or any other unforeseen situation leading to a shortage of the said product.
Businesses that operate in a highly competitive market need to be dynamic and active. To meet the vibrancy in demand for their products, it is important to adopt futuristic techniques akin to safety stock management.
Futuristic and pragmatic, why! Because maintaining safety stocks has associated costs, like warehousing, expiry, insurance, etc. and risks like the non-movement of the excess stock, loss of liquidity, and so on. This is why it is always ideal to have a supply chain expert work on formalizing and automating the logistics part of the business.
Issues with the supply chain can be fatal for the business because it can directly impact sales and revenues. Hence, it needs to be strategically handled and every attempt should be made to remove bottlenecks and unrequired gaps in the systems.
What is challenging is that there are no off-the-shelf generic supply chain solutions that one can simply buy and plug into their business environment.
Every business is different; and therefore, the need for each of them will differ. This means to say that it is time that online sellers realize the importance of customized supply chain solutions that is practical and realistic, effective, and optimized.
Towards this end, speaking to professional supply chain consulting firms can help in complete mitigation of issues and setting up flawless inventory management, warehouse management, shipping, and delivery management systems.