Managing Seasonal Inventory

A few years ago, I interviewed a seasoned supply planner from a global FMCG giant. I asked him, "How do you ensure uninterrupted service when forecasts are often wrong?" He smiled and replied, "I don’t trust forecasts blindly. I trust buffers." That stuck with me. We often talk about safety stock like it’s just another calculation - based on service levels, variability, and lead time. But what we often miss is that safety stock is not a backup plan - it’s a confidence plan. When I worked with a food company in North India, we faced wild swings in demand during festive seasons. Despite best efforts, our forecast error remained in the 25–30% range. Initially, we adjusted demand. Then we tried pushing supply. Nothing worked consistently. Until we recalibrated safety stock - not as a static percentage, but as a dynamic lever. We used historical MAPE to segment SKUs: ↳ High forecast error items had higher safety stock, but only if they were fast-movers ↳ For low runners, we capped safety stock and focused on lead time reduction This single change lifted our service levels from 87% to 95% - without inflating inventory across the board. Here’s what I learned: Safety stock isn’t about covering up forecasting failures. It’s about strategically absorbing volatility where it matters most. It’s not "extra" inventory—it’s "essential" inventory. We often praise forecast accuracy, but sometimes, it’s the silent buffers - well-planned, SKU-specific safety stocks - that save the day. Would love to hear - how do you approach safety stock? Static formula or dynamic levers?

NOT all replenishment methods are created equally. This infographic shows 7 replenishment methods and when to use them: # 1 - Demand Forecasting ↳ Based on: demand ↳ When to use: variable demand, long lead times, or seasonal trends to prevent stockouts or overstock ↳ Replenishment Trigger: inventory required per demand plan    # 2 - Reorder Point ↳ Based on: stock level ↳ When to use: consistent demand patterns, lead times and safety stock can be calculated reliably ↳ Replenishment Trigger: inventory reaches a level that considers average daily sales, lead time, and safety stock    # 3 - Min-Max ↳ Based on: stock level ↳ When to use: stable demand, inventory is used consistently, but occasional fluctuations need buffer coverage ↳ Replenishment Trigger: inventory reaches the minimum level set; the order is to get to the max level.    # 4 - Periodic Ordering ↳ Based on: time period ↳ When to Use: predictable and relatively stable demand ↳ Replenishment Trigger: regular intervals: weekly, monthly, etc   # 5 - Anticipation ↳ Based on: expectations about future outlook ↳ When to Use: high seasonality, promotional campaigns, or events requiring large, proactive stock buildup ↳ Replenishment Trigger: seasonal inventory, expected demand peak, new system implementation   # 6 - Top-off ↳ Based on: production activity and stock levels ↳ When to Use: ensuring storage or line-level inventory readiness before a surge in production or demand ↳ Replenishment Trigger: in down time, bringing inventory forward to reach capacity levels   # 7 - Just-In-Time (JIT) ↳ Based on: demand, consumption ↳ When to use: consistent, predictable production schedules and reliable suppliers ↳ Replenishment Trigger: inventory required for production Any others to add?

Purpose of Buffer Stock in Inventory Management Buffer stock, also known as safety stock, is an essential component of inventory management that serves the following purposes: 1. Mitigating Demand Variability Purpose: To ensure that a company can meet unexpected spikes in customer demand. Benefit: Prevents stockouts and maintains service levels when demand exceeds forecasts. 2. Addressing Supply Chain Disruptions Purpose: Acts as a safeguard against delays or interruptions in the supply chain. Benefit: Provides a cushion to maintain production or sales when suppliers face delays or shortages. 3. Compensating for Forecasting Errors Purpose: Protects against inaccuracies in demand forecasting. Benefit: Ensures that inventory levels can accommodate unforeseen variations. 4. Maintaining Continuous Operations Purpose: Prevents interruptions in production or operations due to stockouts. Benefit: Helps avoid downtime, maintaining efficiency and customer satisfaction. 5. Supporting Seasonal Fluctuations Purpose: Helps businesses prepare for periods of high demand or seasonal trends. Benefit: Reduces the risk of being unprepared during peak times. 6. Enhancing Customer Satisfaction Purpose: Ensures product availability and on-time deliveries. Benefit: Builds trust and loyalty with customers by consistently meeting their needs. Example For instance, a retail store might maintain a buffer stock of popular holiday items to ensure availability even if demand unexpectedly surges or shipments arrive late. By maintaining buffer stock, businesses can balance the risks of overstocking and stockouts, optimizing cost efficiency and customer satisfaction.

How to Master Seasonal Inventory Management What is Seasonal Inventory? Seasonal inventory refers to the stock of goods or products that are specifically tailored to meet the demands of certain seasons or periods throughout the year. These goods are typically associated with seasonal trends, weather changes, holidays, or events that influence consumer behavior and purchasing patterns. Factors to Consider While handling seasonal inventory, there are several factors to take into account, including: 1. Demand Fluctuations Understand the seasonal variations in consumer demand for your products. 2. Lead Time Consider the lead time required to procure seasonal inventory to ensure timely availability. 3. Storage Space Assess the storage capacity needed for seasonal inventory, especially if it is bulky or perishable. 4. Marketing and Promotion Plan marketing campaigns and promotions to effectively promote seasonal products. 5. Trends and Forecasts Analyze historical sales data and market trends to anticipate demand and plan inventory levels accordingly. How to Deal with Seasonal Inventory? Various strategies can be contemplated when managing seasonal inventory, including: 1. Forecasting Utilize sales data, market research, and forecasting techniques to predict demand for seasonal products. 2. Flexible Supply Chain Maintain a flexible and agile supply chain to adjust production and procurement based on demand fluctuations. 3. Inventory Management Software Invest in inventory management software to track and manage seasonal inventory efficiently. 4. Collaboration with Suppliers Work closely with suppliers to ensure timely delivery of seasonal goods and negotiate favorable terms. 5. Discounting and Clearance Offer discounts or clearance sales for seasonal products to minimize inventory carrying costs and prevent overstocking. Benefits • Increased revenue • Enhanced customer satisfaction • Competitive advantage • Efficient inventory management • Brand loyalty Challenges • Demand variability • Inventory risks • Cash flow management • Storage costs • Competitive pressure Conclusion Seasonal inventory management is a critical aspect of retail and supply chain management, requiring careful planning, forecasting, and execution. While it presents opportunities for increased sales and customer satisfaction, it also poses challenges such as demand variability and inventory risks. By adopting proactive strategies and leveraging technology, businesses can effectively manage seasonal inventory to maximize profitability and customer engagement. #SeasonalInventory #RetailManagement #SupplyChain #InventoryManagement #SeasonalTrends #DemandForecasting #BusinessStrategy #CustomerEngagement #RetailTech #ProfitOptimization

Post 27 Lending to Seasonal Businesses: How We Assess Working Capital ? As credit underwriters, we often come across entities whose business is not evenly spread through the year. Think of firecracker wholesalers, agri-commodity traders, woollen apparel manufacturers, or even certain festival-specific gift businesses, all of whom earn the bulk of their income in a concentrated time frame. Here’s how we break it down: 1. Mapping Seasonality with Past Data: We first look at monthly sales trends over the past 2–3 years to understand when revenue peaks and when it slumps. For instance, if 70% of turnover occurs between October–December, we ask: - Can the business sustain operations during lean months? - Do bank statements show cash flow stability post-season? - Is there over-reliance on short bursts of sales? This pattern influences both drawing power structuring and repayment capability assessment. 2. Inventory Holding & Stock Build-Up Seasonal businesses usually pile up inventory ahead of their peak months. This means longer inventory holding periods than usual. Example: A wedding-season saree wholesaler may buy stock in August–September and start selling only by November. The holding period could be 90–120 days, much higher than industry averages. We allow for these higher norms while structuring limits, sometimes also accepting temporary margin relaxation during buildup, though this differs from bank to bank based on their internal processes and policies. 3. Cash Flow-Based Assessment: Instead of relying heavily on profitability, we assess monthly cash flows: - Is there enough buffer to meet interest and instalment payments during lean months? - Do fixed expenses continue even during no-sales months? In some cases, we structure EMIs to begin after the season, or balloon repayments to align with cash inflows. This ensures repayment discipline doesn’t break. 4. Limit Structuring – Peak Season Enhancements: To avoid overfunding throughout the year, we structure: - Temporary peak season limits (e.g., Rs. 1.5 Cr from Sept to Dec, Rs. 1 Cr otherwise) - Interchangeable facilities (like WC + BG with flexibility) - Drop-line CC limits to gradually reduce exposure post-season 5. Risk Mitigation – Insurance & Infrastructure With high-value seasonal stock, we ask: - Is the inventory fully insured? - Is the storage location prone to weather/fire risk? - Are safety protocols (fire NOC, surveillance) in place? Because one warehouse incident during peak season can wipe out most of the borrower’s annual income. Final Thoughts: A standard MPBF formula doesn’t work here. Instead, we customize working capital based on business cycles, risk visibility, and repayment comfort — helping both the MSME and the bank stay aligned through high and low tides. Have you structured limits for a seasonal business recently? Would love to hear your approach.

In Brief: Loss prevention(LP) is often misunderstood as just catching shoplifters or monitoring CCTV feeds. But in both corporate security and retail operations, it's far more strategic than that. Loss prevention is about safeguarding organizational value, from physical assets and inventory to brand reputation and operational integrity. In retail, that means going beyond shrink control to understand internal theft, process failures, and data-driven inventory protection. In corporate environments, it involves protecting intellectual property, preventing fraud, and reducing vulnerabilities across systems and people. Case in Point: A mid-sized retail chain was facing rising shrinkage, nearly 3.2% of sales annually. Initial assumptions pointed to shoplifting, but a strategic loss prevention audit revealed something deeper: ▪︎Poor inventory reconciliation processes ▪︎Limited staff awareness ▪︎No internal reporting channel for suspicious behavior By implementing a holistic LP strategy, staff training, process reengineering, digital inventory tools, and anonymous reporting, shrinkage dropped to 1.1% in just one fiscal year. Not only were losses cut, but employee morale and accountability improved dramatically. For a loss prevention strategy to be truly effective, it must be both detailed and tailored to the organization’s unique operational context. It begins with risk assessments that are customized to the specific threats and vulnerabilities within a given industry, whether that’s internal fraud in retail, cyber risks in corporate environments or supply chain disruptions in logistics. From there, organizations must establish clear, enforceable policies, not just written protocols, but actionable guidelines that are consistently applied across all levels of the business. Equally important is the integration of technology. Tools like smart surveillance systems, electronic access controls, and real-time monitoring platforms not only deter malicious activity but also provide data for analysis and response. Yet, technology alone isn't enough. Training and awareness are essential to empower frontline staff and internal teams to recognize red flags, report concerns, and act with confidence. Furthermore, a strong loss prevention strategy must include ongoing monitoring and evaluation to measure effectiveness, identify new threats, and ensure continuous improvement. Loss prevention isn’t just a security function, rather, strategically, it’s a business enabler. When done right, it reduces exposure, strengthens internal culture, and protects what truly matters: people, profit, and purpose. #LossPrevention #CorporateSecurity #RetailSecurity #RiskManagement #AssetProtection #Security #Safety

How I plan a seasonal inventory assortment in cannabis stores for 2025 There are peaks in customer purchasing over the year, but there are also variances in how people purchase products. Overestimating demand or not paying attention to nuance and changes- can lead to a cash flow pinch when too much cash is locked up in inventory that is not turning. Let's break down the key components of a plan. 1. Note Key Dates and Seasons Create a timeline that includes: - Major holidays (e.g., Super Bowl, March Madness, 420, July 4th, Labor Day, Green Wednesday/ Black Friday, Christmas) - Seasonal changes (Spring, Summer, Fall, Winter) - Local events or festivals that your customer experience - Key tax dates 2. Seasonal Demands Forecast For each key period, consider... - How consumption patterns change? - What special products or categories are in high demand? - What seasonal inventory is relevant? How long is it relevant for? - What you think the lift in sales will be. It's helpful to think of this first in % of $, but then translate that to a projection of the number of units. For Example: Super Bowl "We will see a 60% lift on Saturday/ Sunday, and a 20% lift on Monday (because of Super Bowl Flu). We will be selling shareable products like prerolls and beverages at lower price points. So we will need more prerolls to support a 90% lift in unit velocity to make that 60% revenue lift possible." 3. Add these periods to a Working Timeline Develop a month-by-month plan that outlines: - When to order seasonal inventory - When to start promoting seasonal items - When to phase out seasonal products 4. Combine your seasonal strategy with your overall inventory plan: Set monthly inventory targets COGS on Hand, COGS sold, and Unit breakdowns for each category and sub-category 5. Cash Flow Management Identify periods of higher inventory investment or where there are risks to have inflating COGS on Hand. 6. Check if your assumptions were on or off track monthly. By building a seasonal inventory plan, you'll be better prepared to meet customer demands, manage cash flow, and minimize the risk of excess or obsolete inventory. #7weeksto2025withvetrina Coming up next week... Payroll planning. #cannabisretail

One consistent error I see Amazon sellers in seasonal markets make is not adapting to seasonality cycles. 😅   During Off-Season, They: - Set aggressive sales goals - Overspend on PPC - Neglect product line development and listing optimization - Maintain excessive inventory levels   During Peak Season, They: - Underutilize their advertising budget - Face inventory shortages - Lack new products ready for testing   These missteps significantly impact both their scaling potential and profitability.   A Jewelry brand we support did $247,968 in January sales, and then did $242,677 in the first 15 days of February alone.   The strategic approach in January included: - Conducting a professional photo shoot for bestsellers and updating images across Amazon and their website - Removing slow-moving, low-price-point items to increase Average Order Value (AOV) - Strategically capping their budget to prepare for February   In February we implemented a focused strategy including: - Removed all budget constraints while maintaining ACOS below 25% - Maintained sufficient inventory for Valentine's Day demand   If you're a seasonal brand - review your historic sales volume, and your categories trends.   Change your plan and goals based on what season you're in.   This will help you 'win' on Amazon! #Amazon #ecommerce #seasonality #digitalmarketing #digitaladvertising

Worry for your inventory planning during festival? Here are the ways: To plan efficient inventory for omnichannel supply chain during the festival period: 1. Historical sales analysis 📊: Study past sales data for festival seasons to identify top-selling products and categories. 2. Demand forecasting 🕵️♂️: Use predictive analytics to forecast demand, considering factors like seasonality, promotions, and market trends. 3. Product categorization 🔠: Segment products into fast-moving, slow-moving, and dead stock categories to prioritize inventory allocation. 4. Inventory buffer ⏳: Maintain a 10-20% inventory buffer for top-selling products to account for unexpected spikes in demand. 5. Supplier partnerships 🤝🏻: Collaborate with suppliers to ensure timely deliveries and consider nearshoring or local sourcing. 6. Inventory distribution 🏪: Allocate inventory across channels (e-commerce, retail, wholesale) and locations (warehouses, stores) based on demand forecasts. 7. Safety stock 🆙: Maintain safety stock levels based on lead times, demand variability, and supplier reliability. 8. Inventory rebalancing ⚖️: Regularly rebalance inventory across channels and locations to match demand. 9. Transportation planning 🚛: Optimize logistics and transportation to ensure timely deliveries, considering festival-related disruptions. 10. Real-time monitoring 🔍: Continuously monitor inventory levels, sales, and supply chain performance to respond quickly to changes. 11. Festival-specific SKUs 🎗: Plan for festival-specific products and packaging, ensuring adequate inventory levels. 12. Contingency planning ⛑️: Prepare for potential disruptions, such as natural disasters or supplier delays, with backup plans and emergency stock. By following these steps, you can ensure efficient inventory management, minimize stockouts, and maximize sales during the festival period in India. #Ecommerce #Omnichannel #FMCG #Personalcare #D2C #Beautycare #Demandplanning #Supplyplanning #Inventorydistribution #Festivalplanning

As we approach the critical holiday shopping season, U.S. container ports are bracing for a surge in volumes. However, a looming threat of a labor strike at East Coast and Gulf Coast ports is causing concern among retailers and supply chain professionals. The contract between the International Longshoremen's Association and the United States Maritime Alliance is set to expire on September 30, with the ILA threatening to strike if a new agreement isn't reached. This potential disruption comes at a time when U.S. ports have been experiencing record-breaking numbers. The first half of 2024 saw a 14.8% increase in TEU volumes compared to the same period in 2023. While September is forecast to see a 14% year-over-year increase, the projected growth for the following months is more modest. Strategies for Retailers to Mitigate Risk: 1. Diversify import strategies by redirecting shipments to West Coast ports 2. Expedite orders to arrive before the potential strike date 3. Explore alternative transportation methods, such as air freight for critical items 4. Build up safety stock to buffer against potential disruptions 5. Communicate closely with suppliers and logistics partners 6. Develop comprehensive contingency plans for various scenarios 7. Consider nearshoring or onshoring options for future seasons By implementing these proactive measures, retailers and brands can better protect their supply chains and ensure a successful 2024 holiday season, regardless of the outcome of the port negotiations. Stay informed and agile as the situation develops. #SupplyChain #Retail #PortStrike #HolidaySeason #RiskMitigation