Data analytics essentials for the COVID-19 crisisHow Phocas Software can give you the essential data your Business needs
Written by Phocas Software
The COVID-19 pandemic puts risk management and disruption strategies under the spotlight as companies experience limited supply and others are battling cash flow shortages. For businesses who move and sell products, inventory management can be a never-ending battle. During the shock of COVID-19, when supply and demand are volatile, managing stock presents further challenges. Strong visibility into your operations using data analytics principles can help manage inventory levels and keep cash flow steady.
Answering the most important questions
Whether you’re managing $30 million dollars in inventory across fifty branches or a single location with $800,000 in stock, you probably have similar challenges during this uncertain time. There are some obvious concerns such as
- How much stock do I have on hand?
- Which of my suppliers are most affected by COVID-19?
- What inventory coming internationally is delayed, in transit or sitting at the docks?
- Is our inventory position creating cash flow problems within the business?
- Do we know if any of our customers are in trouble and can’t pay for goods ordered?
Does this sound like your week? As soon as you negotiate a price adjustment for stock in demand, your eCommerce team is letting you know that 50 more SKUs are out-of-stock. At the same time, your finance team just issued a major initiative to review all suppliers. Managing all of these tasks successfully requires accessible and accurate data, along with a sense of what to do with that information once you have it.
These are important business problems and coupled with the changes in buying behaviour due to the Coronavirus outbreak, managers are being forced to re-think inventory and cash-flow.
Some industry analysts are predicting that China will be back to business as usual by mid-April but for the rest of the world, it’s a wait and see as to the ongoing economic effects of the virus.
Businesses in consumer goods and retail are likely to be at high risk of cash flow problems, especially those who with high exposure to China, and those in seasonal businesses where demand for a season will be lost as the product didn’t arrive or from lack of demand.
What to do with your Inventory stock levels?
Inventory safety stock levels will need to be updated to reflect the volatility of supply and demand. Some supply chain experts suggest businesses need to secure additional stock as a buffer to further disruption but if cash flow is tight – you need to be sure you are selecting the products that can sell or you can actually acquire these products. With data analytics essentials, you can model the extra cost to acquire and hold the stock and determine if it is viable before you make your decision.
You need to speak to your suppliers. Some might allow you to delay payment terms or with others – you might need to fast track payment to preserve your supply chain and ensure one of your best customers receives an important order.
It is also worth keeping a keen eye on your account receivables so you know cashflows levels at all times. Some of your customers might be in those industries that are more exposed to the outbreak so you can identify who might need to change their payment terms. Make sure you get the basics right like sending invoices on time and accurately.
Managers of wholesale distribution and retail businesses have a number of core responsibilities that require them to look at many different types of data. The quicker that you know about the problem, the better position you are in and the sooner they can address and resolve the issues before cashflow is gone.
Having all your inventory, customer and product data in one place and being able to analyze it quickly and easily can help you get through these unprecedented times. For more information about how Phocas can harmonise your data, read our blog post here.
Data analytics essentials also enables you to quickly create and share customized reports and dashboards to help eliminate reporting bottlenecks and reduce common analysis challenges within your business.
Data analytics allows everyone in your organization to look at the same data in a format they understand, so you can all make informed decisions to mitigate risk and keep cashflow running. Read more here about how a complete view of sales data can change your Business.
For more information about data analytics essentials and how it can help your business cope with disruptions like COVID-19, contact us on 1300 857 464 or fill in the contact form below. To read more about Phocas Software and data analysis visit the Phocas Software page here.