Six Inventory Lessons for Ag Retailers

This week I read Ag Retailers Rethink Inventory Strategies As Cash Takes Center Stage that dove into dynamics of inventory in ag retail.

There's a general view that a person or company needs to feel pain before they seek change.

In the COVID era, when most products were tight thanks to supply chain challenges, I understand the instinct to inflate orders and forecasts and hold whatever you could get.

But that was never good practice, and inventory discipline didn't suddenly become important. Sound processes have always mattered for retailers. What's evolved is the importance of being proactive surrounding inventory discipline. Carrying millions of dollars of product into another year now costs a few more percentage points in interest, plus storage costs, and moving forward, likely has less protection from suppliers.

There are six things that have stood out to me in working with various retails surrounding minimizing inventory and maximizing sales, in no particular order.

1. Consistent Systems And Expectations - Inventory discipline starts with the boring things. Every location should obviously run on one ERP system, with the same rules/expectations on what gets entered, when, by whom, and who acts on it. Reporting needs a consistent cadence too, so leadership measures the same thing the same way every week, not whatever each location decides matters. If one location enters returns in a specific time frame and another catches up at month end, you don't have a clear inventory picture that allows you take advantage of opportunities, or move products to higher likelihood of sale areas, or simply see whats around. A system of action on top of the ERP, such as AgVend, is a bonus because it nudges staff toward the right action when it’s required.