Safety stock strategies for the summer season
During the summer season, businesses face a well-known challenge: unpredictable spikes in demand. From air conditioners to summer clothing and travel accessories, seasonal products often see unpredictable fluctuations that can catch even experienced planners off guard. To stay competitive and avoid stockouts, businesses must adapt their safety stock strategies to summer-specific risks,including demand surges and delays in supply chains.
Summer brings increased demand for specific products, often influenced by external factors like heatwaves, tourism, and holidays. Focusing only on average sales data can be misleading. A better approach is to review last summer’s performance, identifying top-selling items, and forecast recurring trends.
Understanding seasonal demand drivers
Also, port congestion, public holidays in supplier countries, and increased volumes can cause longer lead times or delivery delays. Factoring this uncertainty into your stock planning is key to avoiding gaps in product availability.
Prioritise your product categories
We recommend using an ABC analysis to classify your inventory:
- A item: high-value or high-demand.
- B items: moderate inventory with room for adjustments.
- C items: low-value or slow-moving.
Missing out on a fast-moving seasonal item can result in lost revenue and unhappy customers. Ensure greater availability for priority seasonal products, even if it requires holding slightly more inventory. For non-essential lines, more conservative safety stock may be enough.
Match safety stock levels to service expectations
Track and adapt strategies during the season
Safety stock should be adjustable based on changing needs: use real-time sales and supply data to make modifications. A flexible strategy ensures that stock levels remain aligned with actual performance.
Stay connected with suppliers
Strong supplier partnerships are fundamental. We suggest you share demand forecasts in advance with them and confirm production and shipping timelines. The more visibility you have into their operations, the better you can plan for potential challenges.
Keep in mind the bullwhip effect
Reacting to small changes in demand can create notable shifts in your supply chain: this is known as the bullwhip effect. To prevent it, ensure close coordination between planning, procurement, and sales teams. Rely on data-driven strategies to make thoughtful and effective ordering decisions.
How Noatum Logistics eCommerce Solutions can help you
At Noatum Logistics eCommerce Solutions, we understand the complexities of managing inventory during peak times. Our end-to-end supply chain solutions help you prepare, respond, and stay ahead with:
- Accurate demand forecasting.
- Dynamic inventory planning.
- ABC segmentation and automation.
- Supplier coordination and visibility.
- Global logistics expertise.
Noatum Logistics eCommerce Solutions helps you manage summer demand effortlessly with the right product, in the right place, and at the right time. Contact us today to learn how we can streamline your supply chain!
Sources
https://www.tadanow.com/blog/inventory-management-best-practices-to-cater-to-seasonal-demand
