rating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did

The demand profile of products that have been on the market for a while, using tried and tested supply routes, can be forecast with reasonable accuracy, allowing inventory levels to be lowered to healthy levels. In an ideal world, the manufacturer will produce the right quantity for the demand that is out there and each point in the chain, through importer, wholesaler and retailer, will draw as much stock as they need on a just-in-time basis. In reality, of course, most products have not had years to mature in a tried and tested supply chain. There is no art to setting a computer system to count 'em in and count 'em out again and tell you how many more to order. There is art and almost beauty in a system that can:

1. Take into account the forecast temperature and other weather variables

2. Take account of local, regional, national and world festivals and events that skew demand

3. Use fuzzy logic to mix in this time-yesterday, -last week, -last month, -last year parameters

4. Take account of pricing of the product, including opposition pricing

5. Include related product performance (if you are selling tinned peaches and a load of low priced fresh peaches come onto the market, you may need to trim your forecasts)

6. Fluctuations in currency values and the economy in any given location

7. Demand variations caused by tv shows or films. Product marketing is usually well co-ordinated with a film producer, for instance, but there are often side-effects: some products that were not purposely placed in the film will still see a spike in demand (or even a fall in demand in some cases). Also, competitors may have been caught sleeping, simply unaware of the placement. That brings us to no.8....

8. Market intelligence. What are your competitors up to, or more importantly, what will they be up to?

The above just deals with the demand side. On the supply side of things you may also want your system to take account of optimum production runs, cubing in shipping containers and other vehicles, factory shut-down times, industrial disputes etc etc.

There are systems that can do some of the above. There are also systems that claim to do the whole lot. You will understand, though, that stock management is still very much a human-led activity. A real person needs to see the quantities that the computer has decided to order. There always must be an override facility. Somewhere in the chain a human being must take responsibility for the amount that is ordered. There must always be a watching brief over the variables that any system uses. Most stock management systems are self-correcting. Even the most crude operations have a self-correcting feature where, for instance, out of stocks result in an increased order quantity next time and over-stocks will obviously see a downward adjustment. And that illustrates the point of this article. No system is perfect. Demand and supply patterns do not follow predictable paths - forecastable perhaps, but not predictable. There will be overstocks and out-of-stocks.

The answer? Well this depends on the product's profitability and how critical it is to your business. If a product is very profitable then it would be a crime to run out of stock. You must maintain stock quantity at well above comfortable levels. The high profitability will pay for the extra costs of storage and even pay for write-off or write-down costs if the product suddenly becomes obsolete (it happens!). On the other hand, a low profit product can easily be tipped into a loss-maker by adding overheads that it cannot sustain. High volume products are high volume for a good reason and they are probably being worked in a very competitive environment. The only long terms answer is to drive down supply costs. A way of mitigating the situation is to get the marketing people to find some space between your product and all the others out there. You need an edge so that volumes can go even higher, thus allowing a pro-rata reduction in costs or even so that you can eventually raise the price of your product to match its perceived higher value (I admit that this is simply unthinkable for some products, whatever marketing you throw at it). Just bear in mind that a small operating loss is just the flip side to a small operating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did

5. Include related product performance (if you are selling tinned peaches and a load of low priced fresh peaches come onto the market, you may need to trim your forecasts)

6. Fluctuations in currency values and the economy in any given location

7. Demand variations caused by tv shows or films. Product marketing is usually well co-ordinated with a film producer, for instance, but there are often side-effects: some products that were not purposely placed in the film will still see a spike in demand (or even a fall in demand in some cases). Also, competitors may have been caught sleeping, simply unaware of the placement. That brings us to no.8....

8. Market intelligence. What are your competitors up to, or more importantly, what will they be up to?

The above just deals with the demand side. On the supply side of things you may also want your system to take account of optimum production runs, cubing in shipping containers and other vehicles, factory shut-down times, industrial disputes etc etc.

There are systems that can do some of the above. There are also systems that claim to do the whole lot. You will understand, though, that stock management is still very much a human-led activity. A real person needs to see the quantities that the computer has decided to order. There always must be an override facility. Somewhere in the chain a human being must take responsibility for the amount that is ordered. There must always be a watching brief over the variables that any system uses. Most stock management systems are self-correcting. Even the most crude operations have a self-correcting feature where, for instance, out of stocks result in an increased order quantity next time and over-stocks will obviously see a downward adjustment. And that illustrates the point of this article. No system is perfect. Demand and supply patterns do not follow predictable paths - forecastable perhaps, but not predictable. There will be overstocks and out-of-stocks.

The answer? Well this depends on the product's profitability and how critical it is to your business. If a product is very profitable then it would be a crime to run out of stock. You must maintain stock quantity at well above comfortable levels. The high profitability will pay for the extra costs of storage and even pay for write-off or write-down costs if the product suddenly becomes obsolete (it happens!). On the other hand, a low profit product can easily be tipped into a loss-maker by adding overheads that it cannot sustain. High volume products are high volume for a good reason and they are probably being worked in a very competitive environment. The only long terms answer is to drive down supply costs. A way of mitigating the situation is to get the marketing people to find some space between your product and all the others out there. You need an edge so that volumes can go even higher, thus allowing a pro-rata reduction in costs or even so that you can eventually raise the price of your product to match its perceived higher value (I admit that this is simply unthinkable for some products, whatever marketing you throw at it). Just bear in mind that a small operating loss is just the flip side to a small operating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did

e above. There are also systems that claim to do the whole lot. You will understand, though, that stock management is still very much a human-led activity. A real person needs to see the quantities that the computer has decided to order. There always must be an override facility. Somewhere in the chain a human being must take responsibility for the amount that is ordered. There must always be a watching brief over the variables that any system uses. Most stock management systems are self-correcting. Even the most crude operations have a self-correcting feature where, for instance, out of stocks result in an increased order quantity next time and over-stocks will obviously see a downward adjustment. And that illustrates the point of this article. No system is perfect. Demand and supply patterns do not follow predictable paths - forecastable perhaps, but not predictable. There will be overstocks and out-of-stocks.

The answer? Well this depends on the product's profitability and how critical it is to your business. If a product is very profitable then it would be a crime to run out of stock. You must maintain stock quantity at well above comfortable levels. The high profitability will pay for the extra costs of storage and even pay for write-off or write-down costs if the product suddenly becomes obsolete (it happens!). On the other hand, a low profit product can easily be tipped into a loss-maker by adding overheads that it cannot sustain. High volume products are high volume for a good reason and they are probably being worked in a very competitive environment. The only long terms answer is to drive down supply costs. A way of mitigating the situation is to get the marketing people to find some space between your product and all the others out there. You need an edge so that volumes can go even higher, thus allowing a pro-rata reduction in costs or even so that you can eventually raise the price of your product to match its perceived higher value (I admit that this is simply unthinkable for some products, whatever marketing you throw at it). Just bear in mind that a small operating loss is just the flip side to a small operating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did

e a crime to run out of stock. You must maintain stock quantity at well above comfortable levels. The high profitability will pay for the extra costs of storage and even pay for write-off or write-down costs if the product suddenly becomes obsolete (it happens!). On the other hand, a low profit product can easily be tipped into a loss-maker by adding overheads that it cannot sustain. High volume products are high volume for a good reason and they are probably being worked in a very competitive environment. The only long terms answer is to drive down supply costs. A way of mitigating the situation is to get the marketing people to find some space between your product and all the others out there. You need an edge so that volumes can go even higher, thus allowing a pro-rata reduction in costs or even so that you can eventually raise the price of your product to match its perceived higher value (I admit that this is simply unthinkable for some products, whatever marketing you throw at it). Just bear in mind that a small operating loss is just the flip side to a small operating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did

rating profit. Do not panic. On the other hand, it could take weeks or even months to recover from an out-of-stock. The loss of goodwill could be a major blow. You need to be in profit for longer periods than when you are in loss, so tweak the controls and don't take an axe to stock inventories if an overstock has temporarily drawn your product into a loss. The important thing is the long term requirement that you keep the customer supplied and maintain - and grow - demand. High volume demand is a valuable thing. It may seem like you are the busy fools, but you have volume and goodwill, and most companies would do anything for that.

When all is said and done, most points in the chain will keep strategic stock. Some will keep investment stock. Some stock, whether planned or otherwise, will be held for long periods of time. Take, for instance, Christmas lines. Many do not suffer from changes in fashions. The same product will sell year after year. It makes sense, therefore, to mothball some Christmas lines for most of the year until their time comes round again. Did I say mothball? This is apt, of course and brings me on to my last point. If you plan to keep stock for a long period, either intentionally or otherwise, don't forget that it needs some looking after. So, if it is clothes, beware of moths! If it is food, beware the sell-by of use-by date. And for EVERY product, and for everyone out there, beware of DUST!

It simply amazes me that products can come out of storage complete with an added layer of dust. Even well packaged products suffer as the dust finds its way to the primary product. Before I open a tin of beans, I will always wipe off any dust, as this may otherwise find its way into the food. Expensive items - take electrical goods, for example - can be affected to the point that they may need to go back to the factory for a clean up. The worse thing, though, is that customer perception will be damaged. Pallet covers are inexpensive and add only the tiniest percentage to costs. They cover the tops of pallet - where most dust will settle. Pallet shrouds cover the sides as well. They will provide even greater protection not just against dust but also against water from overhead sprinklers.

If you are in the business of stock management, then you will know that the human being is an essential part of the process. There is no computer system out there that has ever been able to do all of it on its own. After all the number crunching has been done - and that is the scientific bit - it is time for the experienced and skilled stock manager to weave his or her magic - and that is the artistic bit. Stock management is more than just looking at numbers. Computers see numbers. People see products and customers.