7 EASY STEPS TO SET

UP YOUR SUPPLY CHAIN

CORRECTLY
By Fuse Inventory   |  22, September 2019

   

Fuse Inventory

 Tags: supply chain

inventory management software

supply chain management

merchandise planning inventory planning

supply chain optimization demand forecasting

order management

Supply chain is incredibly daunting, especially if you’re

new to it. While it might seem confusing and
complicated at first, you can tackle this complex field
by breaking it down into a series of simple steps. 

1.       Choose Your
Inventory
Assortment
This is where your genius as a founder comes in. You
know your customers best and you can use your
judgement and qualitative insights to hone in on that
next best thing. Of course, if there’s any data you can
use to supplement your intuition (like what’s sold well
in the past), we encourage you to do so!

We always recommend that young companies start

with a simple assortment of SKUs. You can always add
more as you grow, but it’s incredibly hard to manage a
wide product assortment right out of the gate.

2.       Forecast
Demand
This step is critical because you need to have an
understanding of what sales of each product (down to
the size and color level) will be. Without this analysis,
you could wind up vastly over or under buying
inventory. When you’re just starting out, it’s completely
OK to use an Excel model. Hopefully, you’ve taken our
advice and kept your product assortment simple,
which will make it easier for you to forecast demand.

However, as you scale, there aren’t really any

sophisticated tools out there to help you that don’t
cost a small fortune. That’s why we created Fuse - to
help algorithmically forecast demand at a price point
that doesn’t break the bank.

3.       Size Your
Inventory Buys
Once you’ve completed your demand forecast, you
need to translate this data into an inventory buy and
replenishment plan to make sure that you have enough
inventory to fulfill expected demand. As a young
company, you can’t afford to stock out - it disappoints
customers and damages your brand.

To avoid stockouts, you want to link your demand

forecast to the inventory you have on hand and the
inventory you expect to receive from suppliers in the
coming months. You need to order enough to make up
for the gap between what you have on hand, what you
expect to receive and how much you plan to sell. You’ll
also need a bit of buffer just in case.

Many companies do this work in Excel, but Fuse can

automate the whole process of translating your
forecast to an order recommendation that’s consistent
with your buying cycle.

4.       Track Your
Purchase Orders
Now that you’ve placed your orders with your
suppliers, you’ll need some sort of tracking system to
track these POs. If there are delays or something
arrives to the factory damaged, you’ll want to make
sure to stay on top of it or else you may stock out.

Many companies use Google Sheets, but with Fuse’s

PO module, Fuse has a simple way for you to
seamlessly track your purchase orders. Unlike a google
sheet, once the PO change is logged, we can
seamlessly link it back to your current inventory
position and demand forecast in order to give you a
clear picture of what this means for your business.

5.       Track Your
Inventory
Now you know that your inventory is somewhere
between your supplier and your warehouse, but the
question is, where? Is it on the boat, is it at the dock, is
it in the warehouse? Flexport can help you track where
your goods are. This type of tracking is critical because
there may be delays at customs or in other parts of
that shipping process that neither you nor your vendor
can anticipate. Having visibility can help you make
adjustments and communicate with your customers.

6.       Understand
Your Inventory
Position
Your inventory has arrived. Now, it’s critical to
understand exactly how much of it you have and where
it is. There are two possibilities - you can do it yourself
at your own warehouse or you can work with a third
party logistics provider (3PL). Most young companies
choose to work with a 3PL rather than managing their
own warehouse. With a 3PL provider like 
Quiet Logistics, you can completely outsource both
the tracking and fulfillment piece of inventory
management. While this might seem expensive, unless
your core competency as a business or a founder is
warehouse management, you may be better off
outsourcing.

If you do choose to run and manage your own

warehouse, you’ll need a warehouse management
system like Fishbowl to help your employees in the
warehouse know what’s where and also track goods as
they come in. 

7.       Fulfill Your
Orders
Finally, your products are in your warehouse and you’re
ready to get products into the hands of customers.
This is one of the most critical questions in the supply
chain. There are two parts to this process - order
management part and shipping and logistics.

On the order management side, there are many great

systems out there like Stitch Labs that can help you
make sure you’ve allocated the right amount of
inventory to your e-commerce site, your retail store
and your wholesale business. When you process an
order from a customer on your website, you want to
make sure that you have enough inventory to fulfill that
order. You might have a lot of inventory on hand, but
perhaps all of it is already allocated to your wholesale
channel. These systems can also notify you when
you’re running low. As your company grows, you may
want to expand into more robust ERP systems like 
NetSuite. These types of systems are typically what
people think of when they refer to an “inventory
management system.”

Finally, the shipping and logistics piece is a whole

separate beast. Smaller companies aren’t well
resourced to do this, which is why a 3PL system can be
extremely useful. Not only can they take care of your
inbound goods, but they can also pack and ship goods
to your customers. There are also new software
providers like Shiphawk that can help you and your
customers track where the shipment is. This piece is
critically important because it’s how your customers will
interact with you and your brand, so you want the
experience - from packaging, to shipping, to tracking,
to delivery - to be flawless. 

Staying sane
As a growing company, to stay sane, you need to take
it one step at a time. There are some basic things you
can do when you’re starting out to make life easier and
help you succeed. First, find a 3PL provider you trust
and rely on them to do the blocking and tackling.
Second, while going into wholesale can seem
attractive, you need to be careful about doing this
early on. Working with retailers that are 1000x your size
can be extremely challenging and time consuming, so
you want to make sure to pick the right partner. Lastly,
be thoughtful about how much inventory you buy and
how you finance it. Making big mistakes early on can
literally take down your company. 

We created Fuse to help companies transition from

managing their demand forecasting and inventory
planning process in Excel and Google Sheets to using
sophisticated software. Start with Excel, but don’t stay
there too long. As your business becomes more
complex, mistakes become even more risky and costly.
Make sure to invest in inventory planning software like
Fuse to avoid drastically over or understocking. We’re
here to help you focus on your business, not your
inventory.

LET US KNOW WHAT YOU THINK

ABOUT THIS POST
Put your comment below.

SOURAV BASAK 28/6/2020, 9:53:57 AM

Many startups in the modern world tend to fail

because they don’t plan costs around supply chain,
logistics, and getting the product to the market.
Without understanding your expenses and making the
plan based on that, you won’t be able to do business
correctly.

Anyways, read the below. This might help.

https://www.namasteui.com/setting-up-the-supply-
chain-for-your-startup/

--
Regards,
Sourav Basak
Namaste UI

 Reply to Sourav Basak

RAGU RAGU 10/1/2022, 10:08:38 PM

Specialty Retailers POS Solution

 Reply to RAGU RAGU

ACTIVE SYSTEMS SOFTWARE INC

29/1/2022, 1:32:59 AM

Great Post!! I have read your blog, its very informative.

I am so impressed to read this blog. thanks for sharing.
More info http://activesystems.ph

 Reply to Active Systems Software Inc

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