Data analytics essentials for the COVID-19 crisisHow Phocas Software can give you the essential data your Business needs
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. Inventory management can be a never-ending battle for businesses that move and sell products. Managing stock presents further challenges during the shock of COVID-19 when supply and demand are volatile. Using data analytics principles, strong visibility into your operations can help manage inventory levels, keep cash flow steady, and make a lasting impact on your team.
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 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 will let 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 these tasks successfully requires accessible and accurate data and a sense of what to do with that information once you have it.
What does the future hold for COVID-19?
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.
Consumer goods and retail businesses are likely at high risk of cash flow problems, especially those 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 supply and demand volatility. Some supply chain experts suggest businesses need to secure additional stock as a buffer against further disruption, but if cash flow is tight, you need to be sure you are selecting products that can be sold. 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 always know cash flow levels. Some of your customers might be in industries 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 you know about the problem, the better your position, and the sooner you can address and resolve the issues before the cash flow is gone.
Having all your inventory, customer and product data in one place and being able to analyse it quickly and easily can help you get through these unprecedented times.
Benefits of data analytics
Data analytics essentials help you take advantage of what your MYOB Enterprise Resource planning data has to offer. You can quickly create and share customised reports and dashboards to help eliminate reporting bottlenecks and reduce common analysis challenges within your business.
Data analytics allows everyone in your organisation to look at the same data in a format they understand so you can all make informed decisions to mitigate risk and keep cash flow running.