While your business is tallying up the revenue from the 2018 holiday season and everyone is still flying high, it’s a good time to proactively avoid the post-holiday blues by preparing your company in three key areas – returns processing, 2019 forecasting, and 2018 holiday season process review. Addressing these now will offer continued holiday cheer throughout January and prepare your business for a smoother, more profitable 2019.
According to an article from Retail TouchPoints, how you handle returns is crucial to setting the right tone in your customer relationships and loyalty programs for 2019; the article cites a recent study in which 63% of shoppers said they wouldn’t continue to do business with a retailer following a negative return experience.
From an operational standpoint, handling returns smoothly affects more of your employees than you may think. Finance personnel can’t close the books until they have a full accounting of returns. Inventory/warehouse managers won’t know the best way to arrange inventory if they don’t know return volumes (by SKU). Purchasing staff won’t know how much replenishment stock to order. Those in charge of repairing or selling compromised goods to secondary markets also need advanced notice of the volumes/SKUs they’ll be dealing with in January.
To help employees be effective in these areas, directly link returns to finance, inventory, purchasing, and warehousing (at the very least). Create simple categories for returns and train the employees who handle returns where items belong and how to identify them. Here’s a suggested categorization breakdown:
Be prepared to handle returns as soon as they hit your docks or bins. Items that linger in those areas get lost in the shuffle and return no value to your business. By managing them correctly, you can substantially improve your cash flow.
You probably already ordered proven-seller inventory items to carry you through the early part of 2019, but what will you order for February onward? Let’s delve into how you can start planning now to ensure you carry the right inventory and offer the right product mix in 2019. It requires solid forecasting.
Barring economic catastrophes or fundamental style shifts, most forecasting works well when based on the previous year’s sales data combined with industry trend data. Modern ERP systems can quickly report on your sales, by SKU, and recommend the ideal mix of products and inventory levels to avoid product sell-outs and stock overages.
Beyond SKUs – the ‘what’ of your sales – you must also focus on the ‘how’ in your forecasting. “How did customers buy our products in 2018, and how do we anticipate them buying in 2019?” What percentage of sales came from your website, through your app or a third-party app, in your stores, online-to-store, etc.? You need both your data and trend data for 2018 to accurately predict 2019.
Do you know which processes worked well and which were failures during the 2018 holiday season? If you know already, fix them immediately and notify employees and partners that you’ll be instituting an improved process for 2019. If you don’t know, interview the frontline employees most affected by the processes and ask them what went right and what didn’t. Not only will their insights help you design a better process, but your employees will also feel valued and empowered by having direct input into how they do their job.
Analyze operations to see beyond the obvious areas for improvement. Perhaps your product assembly team fell behind during peak periods of 2018, and you think the problem rests with how the team works. Analyzing operational data may prove you correct – or, you may discover factors you never considered, such as a core supplier frequently delivering items late or a machine with high levels of downtime. By feeding information into your ERP system, you’ll quickly find areas for improvement and ways to improve them.
Businesses of all sizes are competing in increasingly complex environments in which operations must be optimized across a wide range of business functions. Discovering where and how to grow your business cost-efficiently requires the full information capture and analytics capabilities of modern ERP systems – which is where Sapphire comes in. We can analyze your business and help you determine the ERP solution you need to drive even higher levels of business success in 2019. Contact us today.
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