Commentary
The Forbes article linked here provides context for animal health pros as our industry deals with growing resupply costs while holding margins in line to service animal owners.
By land or drone, the retail industry is waging big money on last-mile delivery timelines. The prospect of a return on investment seems murky at best, shares Greg Petro. He describes the competition to provide same-day or next-day services in the retail sector.
A frequently-cited study based on a survey of retailers in 2018 found that last-mile delivery costs an average of $10.10 per package, of which the customer only covers $8.08.
That $2.02 variance will end up in cost of goods sold down the line resulting in shrinking margins and likely require $5.00 or more in sales to begin to recover the delivery loss.
Urgency is an expensive proposition in retail and in B2B. Failure to plan IS a plan to fail.” – Kirk Augustine
In veterinary healthcare, same-day and next-day delivery needs to be reserved for a small percentage of items that are used only in emergency situations. For 80 percent or more of items, an inventory replenishment strategy using a 10-to-15-day quantity-on-hand as a reorder point ensures products and supplies are available when needed. Home delivery services further support keeping the needs of individual animals served without housing the inventories in house <Link>.
Source: Forbes, March 8, 2023. Link.
Also see: Inventory management is a team sport, AHD. Link. Supply chains may be recovering in 2023 but urgency is always something to avoid. Inventory activities are an important consideration for all personnel who use SKUs in animal health locations.
Also see: Search for inventory, AHD. Link.
INSIGHTS: Whether B2C or B2B it is everyone’s responsibility to help slow rising delivery costs using simple proactive planning.
If you use peanut butter three or more times a week, reorder it when the jar is still half full not when you need a sandwich.”
NOTE: Veterinary Care Logistics offers a free mini-course of proven processes for taking back control of clinic inventory <Link>.
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