By Ela Matters Staff 
Stockouts can be detrimental to a business. When a product is running low or has completely sold out, this can result in frustrated customers, who may decide to shop elsewhere. No business wants to send shoppers to their competition’s door, but stockouts are a quick way to do that.
With this in mind, be aware of the risks, particularly as your peak season approaches. Learning how to minimize stockouts during this time is crucial, and this post fortunately outlines three steps to avoid low stock from occurring.
Enhance Demand Forecasting with Historical Data
One of the first steps to minimizing stockouts when approaching peak season is by improving the business’ demand forecasting. Accurate forecasts can enable you to optimize inventory levels, which can lower holding and warehousing costs and increase operational efficiency across the supply chain. By preventing excess inventory, you will also experience smoother cash flow, and these funds can be used in other areas of the business.
Artificial intelligence (AI) and machine learning should be utilized when doing this. These tools can analyze historical data, market trends, and other data to generate more accurate predictions, allowing the inventory levels to be adjusted dynamically. Systems that are implemented should provide real-time data on demand changes and stock levels to enable quick responses to customer preferences and possible issues.
You can also use the historical data to account for seasonality and other trends. Holidays, seasonal variations, and other predictable trends should be built into your models to ensure your inventory aligns with anticipated spikes or slow periods.
Implement Inventory Management Software
The next factor to tackle is the inventory management software. A reputable inventory management system can offer your business a host of benefits, from providing real-time stock visibility to automating reordering processes. This should integrate with your other systems, including accounting and e-commerce, to ensure all operations are correctly aligned, which will offer a holistic view that supports fast replenishment.
When implementing inventory management software, it is important to look out for the right features. You should prioritize features like automated reordering, real-time tracking, and reporting. This will ensure operations run smoothly, with the system generating purchase orders when stock runs low and monitoring analytics to identify patterns and understand trends.
If you want to take this a step further, you could partner with a third-party logistics company that specializes in e-commerce inventory management. A 3PL can offer the advice and support you might require to maximize the customer experience, fulfillment, and shipping, particularly if you have run out of stock in the past. As they are responsible for receiving, storing, and tracking your inventory, they can help you adapt to shifts in order volume promptly.
Consider Hiring Temporary Staff
Seasonal or sudden increases can be eased with the right software and technology, but your business will also require human assistance in the form of workers. Temporary staff can be hired during these times to ensure the business can handle the workload fluctuations without making long-term financial commitments or overburdening permanent staff. This on-demand staffing will keep operations running smoothly, maintaining customer satisfaction and product availability.
It is best to have a strategy when hiring temporary staff, as this will ensure the right roles and requirements are met. You can do this by calculating the exact number of temporary hires needed for specific roles, which could include management and/or stock handling. Knowing which roles need to be filled will also enable you to create a list of required experience and skills.
A recruitment agency could be used to achieve faster access to the talent pool, but you might prefer to hire staff directly. No matter which method you choose, you should craft a detailed job ad to find the most suitable applicants, who will then need to be screened and interviewed.
To conclude, a business’ peak season can vary depending on its industry, but there will be certain issues that affect all. One such issue is the risk of stockouts. It is vital that you understand how to avoid stockouts, and this post has explained three key steps to do just that.