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3 Strategies for Managing Your Channel Inventory
Frank Sinatra famously coined the phrase “The City that never sleeps,” as an ode to his beloved New York. Embodying the persona of the Big Apple perfectly, Sinatra alluded to the endless heartbeat that is New York City: A living, breathing organism that never stops moving. But Sinatra’s retrospective idiom doesn’t just apply to New York, but also within the channel industry, in particular, managing channel inventory—a b2b process that would seem to have nothing in common with the Empire State.
Now, before you roll your eyes and ironically applaud the inept audacity to even suggest such a caparison—realize that both New York and channel inventory ecosystems are engulfed with moving parts, sightseers, miscommunication, constant repair, stock outs (i.e., Hamilton Broadway musical), and unexplained frustration (see: my dad).
But, no one is to say that these comparisons should spotlight New York in a poor light; these are the features that make the Concrete Jungle what it is: “The City that never sleeps.”
Channel inventory management, on the other hand, not so much.
Here Are 3 Strategies that will save you a good night’s rest when managing channel inventory:
1) Strategize inventory levels based on demand
Inevitably, inventory units will differ greatly between distributors.
It’s imperative to evaluate each distributor inventory levels based on the size and speed of purchases. In an attempt to better clarify inventory trends and product building needs, establish transparent communication with your channel manager.
Once established, you can suggest categorizing inventory based on metrics of demand, such as applying a larger stock buffer for faster-moving inventory; faster-moving inventory mandates heftier market protection, whereas “cold” units necessitate less priority in the case of stock outs. This not only helps your productivity line but the distributor’s risk of losing customers.
2) Motivate submission of timely inventory data as an incentive
As a manufacturer, you’re constantly monitoring the marketplace for opportunities and threats to better prepare/prioritize production.
Evaluating distributor inventory data is essential to this process, and when reporting is done without urgency or cohesion—productivity suffers, as does business. To coerce a healthier, happier and more effective channel relationship—motivate channel partners to submit inventory with combined incentive programs. When deadlines on reports are successfully transpired, managing inventory is done with consistency and speed.
3) Gain an inside perspective on distributor performance
The channel industry relies on routing a product via partners that consistently generate revenue. From beginning to end, each product SKU necessitates cohesive action to take place, which mandates confidence in channel partners’ performance to consistency occurs. When productivity declines and opportunities lose stamina, it may be time to establish better communication with channel partners.
Visit their inventory base and speak with management to assess roadblocks.
Do they have the right amount of inventory to meet customer demand? Do they have inventory shortages/overages that are affecting yours (and their) ROI?
Speak with the indirect sales team to understand their go-market strategy, and work closely with executives to ensure proper training (of product) is provided. Inquire feedback and kindly input your opinion, because even the slightest channel ‘bump’ can snowball into a snowstorm.
Cleanse and Validate Inventory Data for Channel Insight and Productivity
Computer Market Research created the CMR Channel Inventory management module to provide manufacturers with the visibility and the peace of mind that their product is in the right place at the right time.
Robust Capabilities Include:
- Monitors price protection
- Evaluates inventory levels
- Sale by product
- Current warehouse
- Inventory balance
- Pending returns
- Measure price reduction impact