There has been a lot of discussion this month on the deficiencies of the ObamaCare website, HealthCare.gov. Its performance doesn’t match the promises made before the site was launched. The results: frustration and a lot of finger pointing. But take a moment and ask yourself, “is our inventory/replenishment software any better?”
Over the past 30 years I have worked with over 2,500 distributors, manufacturers, retailers and service organizations. Most of these companies have spent a lot of money implementing what promised to be a “state of the art” computer system. Most of these systems do a fine job processing orders and managing financial operations. However, some of them do not include features necessary for buyers to properly maintain and replenish inventory. This, despite the claims made during the pre-sale period of the software’s outstanding inventory-related features.
The result: frustrated management and buyers. Management wants to know why their buyers aren’t using the expensive new software. Buyers complain that the software does not produce realistic replenishment suggestions. As a result, they must manually review the inventory status and usage history of each individual product when deciding when to replenish stock of an item and how much to order.
How can you avoid this unfortunate situation? You must thoroughly test potential inventory systems before you invest in one of them:
- Review all of your current replenishment policies and procedures with prospective software providers. Have them explain how each situation can be handled with their solution
- Insist that prospective software providers load all of your inventory items (or at least the items in one warehouse) into their systems.
- Have each potential vendor generate suggested replenishment parameters (e.g. minimum/maximum quantities or reorder point/reorder quantities) for each item
- Have your buyers review the generated replenishment parameters. Show potential software providers several items that buyers question.
- Allow the vendors to modify software settings and/or propose solutions to better handle any parameters that are not providing the desired results
- Be sure that your buyers understand how the proposed software will determine when to order products and how much to order
As we’ve seen with the HealthCare.gov web site, a successful system requires far more than some fancy marketing materials and good looking screens. You have to be sure it is an effective tool to manage what is probably your largest asset. Ensuring that you implement a comprehensive replenishment solution is an essential element in your company’s quest for success.