Seasonal Product Management

Client / Profile:

National Hardware chain

Issue:

Profit from Gardening supplies was unacceptable because they were constantly either overstocked or out of stock. 70% of annual sales from this category occur in spring / early summer.

Cause (Benefit):

Inventory system used the previous ten weeks sales to create purchase orders. This meant they went into summer with only enough stock to support winter demand levels. This caused significant out of stocks. Conversely as they came out of their peak sales period their system was still ordering, when demand was about to plummet.

Response:

Implemented forward-looking tier one Inventory solution.

Outcome:

Massive increase in profitability within the category as sales were maximised and inventory reduced overall.

Learning:

Backward looking Inventory systems rarely work and must be replaced with more sophisticated forecasting tools.