It’s Time to Rethink Your Inventory Program
Inventorying Woes
We are often approached by clients asking about our ability to inventory and warehouse materials. My first thought is usually, “(sigh), that’s never a good idea.” But why this knee jerk reaction?
First, let’s acknowledge that carrying inventory and warehousing collateral has its uses. If you have a clear understanding of supply and demand, planning and managing inventory may be the right move. The decision of what, where and how much inventory to carry should be informed by data. You should carefully consider the shelf life of the content as well as the volume and frequency of use. If your items are in high demand and move quickly or if the content has a long shelf life, warehousing may be the right strategic move.
But we find many clients lean on the idea of inventory simply because that’s the way it’s always been done. It is not a strategic decision; it’s a legacy workflow. When inventory gets low, products are auto renewed (often in massive quantities). Order quantities remain static while the distribution volume may be gradually decreasing. Those publication “overs” end up on a shelf with little chance of ever being used. Without adjusting for market changes, inventory programs quickly become mismanaged and/or dated, which leads to waste.
As you assess your existing inventory systems—or if you are considering implementing a program requiring inventory and warehousing—here are a few things to keep in mind:
Cost implications
Carrying inventory is expensive. While bulk printing offers more competitive per-unit costs, it requires the up front investment and cash. It is difficult to fight the psychological desire to get the most bang-for-your-buck by printing hundreds, even thousands of units more than you need to avoid the risk of a reprint later. But we increasingly find that clients overestimate print volumes and inventory often goes unused. This is a tough habit to break, but it’s one we work hard with our clients to avoid.
Inventory management also requires time—possibly one of your most valuable assets. Do not underestimate the amount of time and effort involved with not only setting up, but subsequently managing inventory. Do you have a team member with the bandwidth to manage it, or do you have the budget to hire? If your answer is “no,” you may want to rethink whether an inventory program makes sense for your business. And finally, there are overhead costs for storage and handling. Yes, you pay monthly for materials to sit on a shelf.
Product obsolescence
Inventory runs the risk of becoming outdated or obsolete. What happens if a course is discontinued or the latest research contradicts the content of your existing materials? Suddenly, your inventory is useless. Even the simplest promotional product like a branded mug or pen becomes obsolete the moment you make a subtle change to your brand, logo, or tagline. More importantly, inventory appears as assets on your balance sheet, a reflection of what your company is worth. Disposing of inventory is quite literally like burning cash. And to top it off, it’s usually a service your warehouse company will charge you for—trash/recycling pick-up isn’t free.
Lack of flexibility and relevance
One reason we tend to push back on bulk printing and inventory is because it inhibits flexibility, product customization and relevance with static items. As a company, we are hyper-focused on personalization and relevance in print. We know that marketing campaigns that don’t have relevant content see an 83% lower response rate than those that do. It’s difficult to be relevant with one-size-fits-all products like generic welcome letters, evergreen collateral and static content. Print-on-demand (POD) is a great alternative. We have plenty of ideas on how to balance inventory and customization, but more to come on that later.
As you can imagine, there are other considerations around inventory: system integrations, sustainability, and logistics to name just a few. Our advice?
- Be strategic and use data to inform your inventory programs.
- Be practical about how much inventory you truly need. Keep track of every inventoried item—ideally the product demand allows for stock to be used in 6-12 months.
- Be open-minded about rethinking product management, shifting to print-on-demand, and minimizing waste.
In a follow-up post, we will explore the POD model, where it fits, and how to transition from inventory to POD—be sure to check back for more.