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Introducing the Word “No” into Your Supply Chain Vocabulary

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As a distributor, you want to meet your customer and prospect demands.  But sometimes the word “no” is necessary and beneficial to both you and your customer.  In this challenging economy, it may be tempting to take on any customer under any circumstance, no matter what they demand.  However, this could result in excess inventory and create more financial damage than not taking on that client at all.

Your customers are of course a high priority, increasing Service Level and ultimately inventory is often the way to reflect that priority.  However, you’re in the business of buying and reselling products to make a profit. If doing that is not profitable, well then you shouldn’t be doing business. If a certain product or a certain customer is not bringing in more money than they’re costing, then the word “no” is essential. Come on, say it with me: “No”. “No” is difficult to say even in our personal lives, but then we find ourselves overcommitted, stressed out, and bitter that there isn’t enough time in the day.

The same goes for your business. If you over-promise something you can’t provide from your inventory, then your customers lose trust in you quickly and with so many other options, they’re sure to jump ship and do business elsewhere. Because of this competition, you may be hesitant to turn anyone away; well it is definitely better than jumping hoops to make them happy only to find yourself out of money and resources.

Turning down any business seems counterintuitive; however, overstocking your inventory can be worse than not taking on that prospect in the first place.  All it takes is a little inventory planning and analysis, but sometimes saying “no” can save you from a bad situation.  For more information on how to improve your supply chain, please contact RockySoft.

 

By Jeffrey Porter with RockySoft, Microsoft Dynamics software provider for demand planning

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