Indirect channel sales continue to grow as a percentage of overall sales, especially in High Tech products. New products, new markets, demand for shorter product lifecycles, and faster time to market, all mean more inventory in the channel. And without proper visibility, it’s easy to find your business at risk with large inventory liabilities when conditions change, or to miss market opportunities due to poor inventory deployment or channel leakage.
In fact, an executive at a large High Tech products company recently told us that it took them 75 days to get accurate information on inventory levels across their multi-tier channel. As a result, when business slowed rapidly last year, they found themselves with too much of the wrong product in the wrong places in their channel, costing them millions of dollars to correct. Even though they were using some of the strongest product forecasting tools available, without timely visibility and insight into what was really happening on the ground, they couldn’t tie real-time market activity back to their forecasts to make the right channel inventory decisions. He has vowed never to find himself in that position again!
Are you at risk as well? What about your channel inventory? Do you know where your inventory is in real-time? Can you quickly evaluate price change impacts due to price protection commitments? Are you losing revenue from gray market activity? Do you have obsolete inventory in the channel waiting to surprise you with big returns? It’s easy to ignore inventory problems when you don’t know their scope and sales are growing, but there is big money on the table if you can optimize your channel inventory management before it becomes a problem.
