Big retailers are feeling the slap of overstock and the supply chain bullwhip.
These last couple of years have been plagued by supply chain challenges. From congested ports, to lack of equipment, lack of workers, Covid lockdowns, war in Ukraine, and the boom in e-commerce, it’s been a delicate dance to strike a healthy balance between supply and demand.
At the beginning of the pandemic, many products were flying off shelves faster than could be restocked and as consumer demand changed, so too did retailers’ ordering strategies. To keep stock in line with demand, they’ve had to up their order sizes to more than they need.
Vice President of Strategy Nikki Baird at retail software firm Aptos LLC has said she’s observed cases where clients had to order double the amount of inventory to get only a portion of what they need. “You could look at an inventory-to-sales ratio and say, ‘Oh, they look like they’re doing okay.’” She went on to add, “But what’s happening under the covers is they’re way overstocked in these categories, and they’ve sold out on these, and they still can’t get a lot more of the things that are moving fast.”
The issue has been compounded by peak season and impending large shopping events like back-to-school and winter holidays.
However, while more orders are being fulfilled at the amounts requested, some still are not. So it’s a game of roulette to see just exactly what’s going to come in and where inventory levels are going to sit. Retailers have to decide if they want to utilize an ordering strategy where they may get more than they need and be overstocked or risk empty shelf space.
At RS Express, we’re working on keeping our strategies elastic and resilient to meet your needs and keep your cargo moving. If you are facing overstock issues, we can help. We have short and long-term storage options available for you. Please contact us for options.