Understanding Customers Key To Inventory Control

When it comes to inventory control, jan/san distributors have to consistently do a bit of a high-wire act. Profitability and customer service are always top priorities, but accomplishing one might come at the expense of the other. 

Take what distributors keep in stock, for example. If they’re concerned about running out of a product, they could stock up on that item to ensure they’re able to fulfill a request and keep the customer happy. However, if distributors get too overzealous with purchasing and miscalculate how much of a product customers will desire, they’re stuck with inventory that takes up space and ties up capital. This is what makes striking the right balance of inventory so important.

One of the first things a jan/san distributor can do to ensure it has the right amount of inventory is to establish a better understanding of what the customer wants and doesn’t want. By fostering a strong working relationship with each customer, the distributor remains more in-tuned with its needs, allowing the two sides to develop the most accurate forecast of what should be ordered and when, says Jon Schreibfeder, president of Effective Inventory Management Inc., Coppell, Texas.

“If you’re someone who sells solely on price, you’re going to have a greater tolerance for stockouts,” says Schreibfeder.

A distributor who hangs its hat on great customer service, adds Schreibfeder, is going to want to go a different route — one that will appeal more to the customer.

Since distributors have different strengths and clients aim for different service levels, discussing these traits can put the duo on the right path to a successful partnership.

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Prioritizing Safety Stock And Other Inventory