Direct-to-Store replenishment model
25% of COGS is spent on average by retailers to hold and maintain their inventory. More and more businesses are coming to the realization that holding inventory presents a very high cost to the business. In an open to buy model, the buyers cannot rebuy until the ratio of inventory to sales shows signs of profitability.
Image a ZERO inventory warehouse – Possible? Yes with cross-docking and Direct-To-Store model.
There are only two ways to reduce inventory: increase forecast accuracy and stabilize vendor performance or cross-dock inventory.