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Optimize Your SKU Velocity with these Best Practices | LoadProof

 


This post is about the best practices to track the velocity of your SKUs which is important to know as a DC manager and as a director of DC. As a supply chain inventory manager of your supply chain you got to know what are your A SKU’s, what are your B SKU’s, what are your C SKU’s. A SKUs are the fastest moving SKUs and the B SKUs are the moderately moving SKUs and C SKUs are the slow moving SKUs. The last thing you want to know is how to slot your A SKUs, slotting all the way far at the back of the DC will make the operators to walk more. That’s why it’s very important to know your fast moving SKUs like A+ SKUs, which is even faster. There are even more fast moving SKUs that could be a seasonal phenomenon that happens only during the peaker holiday season, where someone is ordering a specific SKU like a not very popular toy or a very popular gift item for all their friends and family.

Recently we had a customer that went live, there was a Rachael Ray’s Evoo bottle which was one of the fast moving SKUs.

  1. So when you know that this SKUs are fast moving, then you stay on top of it and make sure that the PO’s are in place to get those SKUs to be manufactured so you have that product in the DC all the time. You will never run out of that SKU and the last thing as any retailer or any distributor or as a business you don’t want a dissatisfied customer who came to buy it and they weren’t able to buy it and they went somewhere else because of the bad experience and you lost a customer. That’s why it’s very important to stay on top of these SKUs and it’s very easy to determine from your WMS, as it would automatically track it.
  2. The WMS does have the ability to track it or all you have to do is take your sales history and filter SKU quantity. That said it’s very simple spreadsheet and do it, doesn’t mean though you’d be able to see well. There will be SKUs that you sold the most and then the SKUs you sold the least. Now you will be able to know ABC with which you can categorize and then again if you run the same report for a peak season you can figure out easily your A SKUs then there might be some A+ SKUs. Also you there would be some kind of aging report, which tells about what is sitting in your DC from one time they thought it is moving.
  3. Have your inventory manager to make sure that the inventory is in sync between the host and between the ERP and between the WMS and within the WMS. The inventory manager must be able come out with different inventory buckets and locate those inventory with accuracy and makes sure that the cyclic counting is done correctly so your inventory count is clearly visible. From an auditing perspective you have to know whatever inventory that you have in your DC needs to be accurately reflected in the books because only then the quarterly financials can be accurate and also the yearly financials can be accurately released.
  4. The last thing you want is some SKUs sitting there without selling for a long time and you have to find that, it could be like E, F SKUs so if that’s not at all moving for whatever reason so you have to stay on top of this.
  5. The other important thing to keep in mind, once you figure out this A, B, and C you should get your slotting and optimize, that means you shouldn’t want your people working walk a lot of distance for areas just that doesn’t make any sense.

So the A SKU need to be slotted close to the packing station or closer to where you know the shipping process is performed whereas the D and the E could be farther away because you know you don’t want people walking as those SKUs sell less so people are going to walk less distance when this SKUs are slotted far.

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