During the last last lesson of Logistics we were talking about the management of inventories and its different parameters. This is a difficult issue that appears in the management of every companies, independently of their size.
Here I wanted to comment some troubles that some big companies, like Best Buy, Walmart and Nike, have had with the management of their inventory, in order to observe the difficulty of it.
In December 2011, Best Buy communicated that owing to the high increase of the demand in some products with deals, they had had problems to supply the 100% of orders of their customers. They apologised for the discomfort caused with the respective notification to the affected customers. The fact that Best Buy failed managing the inventory not only affected the sales, it also diminished their customers’ confidence.
Recently have appeared some problems in Walmart for lack of stock. Little by little, customers have stopped buying their products owing to bad service and to its, each time more common, empty shelves. Waltmart’s logistics is calculated with and amazing accuracy. However, some analysts have attributed the problems to a bad management in their inventory.
Retail sales is a very competitive sector, so a bad management in their inventory can destroy a company soon.
The last example I wanted to mention is Nike. In 2001 Nike failed implementing a software to manage the supply chain. They installed the system of demand’s management without testing it adequately. The result was an excess in stock of low circulation products and a deficit of very popular products like Air Jordan. This supposed the company a loss in sales of $100 millions dollars.
As we have observed, a bad or wrong management in their systems of stock management can generate high amounts of loss in their sales, but also of customers, so the management of inventories remains a key piece for companies.