As we all know, managing your inventory is one of the key parts in running a successful business. Having too much inventory is not good because inventory depreciates while it just sits on your shelves or in your warehouse. Having not enough inventory is also not a good thing because I don’t think there would be someone who is happy about waiting to buy what they want or need. So main question here would be how do you find that perfect balance?
To control your inventory in an efficient manner, you need to make sure that you do certain things. First of all, you need a good inventory control system without which your simply would not be able to fulfill your orders in an efficient manner. Also, you need make sure you do not have excess inventory, because it gets deducted from company’s bottom line and can lead to you losing money, so you need to make sure that you do not overstock. Another part would be to have a good inventory tracking system that would allow tracking the damaged product and preventing it from getting to a customer.
As an example I would like to share a recent personal experience that I had with PUMA. Few months ago Puma was having their end of the season sale offering 40%-50% off their clothes when you buy it online. As excited as I got, I bought two sweaters and two t-shirts. After a week I got my package with only one t-shirt inside. When I called their customer service I was told that the items that I purchased were out of stock therefore they will refund me my money for the items that I did not receive. It was very unpleasant news to me, but what was more unpleasant was after my phone call I went online and looked at the items that were available for sale, and both sweaters that I wanted and other shirt were still available; nowhere did it say that these items were out of stock. In my opinion, PUMA has a very poor inventory control system that allows them to sell things that simply do not have. Things like this could lead to bad customer relationship, because you just get discouraged when something like that happens.
On the other hand Apple’s inventory management is probably one of the best one out there. Most of the things that you order from Apple’s website come directly from their factory in China, so they do not have to waste money on inventory storage. They also have one of the best delivery systems and we have seen it recently with their iPad launch, when just a few days after announcing the product it was already available for sale, while other companies take weeks.
Has anyone had any similar experience that you can tie to inventory management? Or do you have any suggestions for PUMA to improve their inventory control?
http://www.ehow.com/info_7754850_results-bad-inventory-control.html
http://www.phonearena.com/news/Apples-secret-sauce-for-success-is-inventory-management_id28558
In todays society, I think that PUMA should definitely have a better way to manage their inventory. There are so many different types of technology that could help them organize themselves, there really is no excuse. I am unsure how they store their inventory, but if they have it in various locations, one option would be to move all inventory to one warehouse, or to only a few warehouses. Next, just as the guy is doing in the picture you added, they should have some sort of scan system. This way a computer could do the work for them. If they want to be even more exact, they could do an inventory count on their own. It may be tedious, but it will help their profits. Disappointing customers such as yourself, will cause you to have a bad view about PUMA and not want to buy from them as much any more. I’m sure the next time they have a sale you will not be as excited and will not be ordering as many things, and spending as much money because the chances that you get your stuff are around 25% from your experience.
I think that by having better inventory management and by spending some money on technology to help them with inventory, they will see higher profits. The costs may hit them at first but in the long run the customers will be happier and more willing to spend money on their website.
Since PUMA’s inventory management is poor, their customer base could shrink. Having something like that happen to me would make me not want to go back to PUMA. On the other hand, that could have been an oversight. This could be miscommunication from inventory management to their marketing team. Yet that does not make it any less of a problem. Large companies like PUMA should have their communication down, especially when their competing against other large companies like Nike and New Balance.
This post made me wonder if Puma Company uses revenue cycle. The revenue cycle is associated with goods and services provided to customer and collecting payment from them. Definitely, PUMA should provide the right product to the right customer. They should informed customer if sufficient inventory is available. I am an accounting major, and last semester I studied about inventory control. Companies should create back orders for items that are not available. If Puma would not change their inventory control system, then they would be loosing customers because usually customers are not willing to wait, and they might buy from other sources. There are many ways to improve the inventory control system. One way is to use RFID tags (Radio Frequency Identification) because those tags automatically update data in the system. In addition, the accountants and sales managers should work together to come up with the probable sales forecast and find the best way to improve Puma’s inventory control system, so customers would be happy purchasing their products.