As you bring your franchise to life, you will heavily rely on your vendor partnerships for a timely...
It's more than the jeopardy answer to 'an awesome way to gain efficiencies and cut costs.'
A few weeks back, we did an article about the Supply Chain Issues and how to overcome them – largely by utilizing an Inventory Consolidation Program. Since that post, we have received a desire for more education on the subject – which we are more than happy to share! In this post, we’ll take a little deeper dive into what Inventory Consolidation is in the Franchise world, and why it is beneficial, before sending you off with some tips on how to apply its practices (and benefit from them) today.
Jump to visual here!
What is Inventory Consolidation?
While this customized solution looks different for every concept, at its simplest it is an ordering and communication strategy to prepare for growth to the best of your ability. In the interest of Franchise Construction Rollouts, Inventory Consolidation is a way for you to simplify your brand’s supply chain by consolidating vendors, items, and orders to support the efficiency and investment of your brand’s growth.
Why is it important?
The overall process of placing larger orders, shipping them to a central location, and sending out consolidated shipments (think business in a box!) saves on overall costs, and efficiency, and reduces your carbon footprint... not to mention the peace of mind you will have knowing your brand is ready for growth!
Reduce Costs
No matter how in-depth you implement your Inventory Consolidation practices, there are savings to uncover by investing in the future needs of your brand. By consolidating your orders into larger quantities, you will trim all those shipping costs down - potentially to one! Many vendors will have a bulk discount or incentive for you to utilize – bringing the cost down even further!
Improves Efficiency
Think about your internal operations team. Is a lot of their valuable time dedicated to the monotonous task of tracking packages, reaping havoc on your overhead? Chances are, yes! Whether you utilize a third-party Inventory Consolidator or house it yourself, you consolidate their efforts into tracking fewer shipments – giving them hours back into their schedule while reducing your carbon footprint.
The efficiency benefits also work hand in hand with getting ahead of supply chain issues. By ordering months out, you are staying ahead of the curve and can plan to pivot without your concept skipping a beat. Read more about supply chain issues, and how to get ahead of them, here!
Quality Assurance
A little bonus benefit of consolidating your inventory? A better opportunity for quality assurance! Once your shipment comes in, you can check everything right away to ensure it is up to standards. You can trust that if you utilize Spark FS as your Inventory Consolidator, we will do the same!
No Investment Required Tip: Share your Forecast
While not all concept infrastructure is arranged in a way that can order months of inventory in advance, there are practices you can implement (and benefit from almost immediately): sharing your forecast with vendors! It’s a great start to an Inventory Consolidation program, which you can always build off as your capabilities increase. It is the most cost-effective, underrated way to prepare and continue to build rapport with your suppliers as your brand grows.
Most manufacturers will be excited they have been chosen to support your growth and will appreciate the advanced notice. After all, you are trying to give them consistent business! While it varies depending on the item in question, forecasting the upcoming 6 months/year together will always be appreciated. Depending on their capabilities they may set up a special program for you – guaranteeing a certain stock per order received, bulk discounts, etc.
Worst case scenario they can’t help right now – but always worth setting up a call!
Conclusion
Even taking small steps toward consolidating your inventory will benefit the growth of your brand. Here at Spark FS, we have several customized Inventory Consolidation programs for our brand partners ranging from forecasting with suppliers to our most inclusive business-in-a-box (shown here as Truckload Tetris)!
We would be more than happy to talk to you about your needs to arrive at a customized solution that benefits your brand. Reach out today!
