Frequently Asked Questions (FAQs)
Most catalog and ecommerce companies share similar problems: challenges with sales growth, pressure on gross margins, frustrating backorders and out-of-stocks, and overstock liquidation.
Direct Tech’s AllChannel™Suite of products is designed to help manage these problems and more. The FAQs listed below are the questions we hear throughout the industry, and can help you understand where our products affect your business.
Q. How can I reduce backorders and out-of-stocks with Direct Tech software?
A. Backorders are an expensive part of life as a catalog or e-merchant, but there are ways to minimize them and increase sales and profits through improvements in forecasting and inventory scheduling. Direct Tech’s Demand Planning solutions improve the accuracy and efficiency of the forecasting process and integrate the forecasts into an inventory master schedule, so the user sees projections of future weekly inventory levels. This allows for exception reports – we call them Hot Lists – pinpointing likely future backorders and enabling timely corrective action by the planner/buyer.
Q. Does Direct Tech software help reduce overstocks?
A. Yes. The same tools that help an inventory planner improve forecasts and see future out-of-stock problems also provide visibility to future overstocks in the week they are projected to occur. This visibility allows the inventory planner or merchandiser to take prompt actions to increase sales or work with the vendor to reduce future purchase orders. The improvement in forecast accuracy provided by our Demand Planing Solutions will also reduce overstocks through more accurate initial purchases.
Q. Forecast*21 is great, but it’s only for planners or inventory control buyers. Do you have any tools to help with merchandising?
A. Forecast*21 is our longest-standing product – used by planners and inventory control buyers since 1996. More recently, we have introduced two products to help with merchandise analysis and planning. Our Merchandise Assortment PlanningSystem (MAPS) is used by merchants and merchande planers for top-down allocations of future category plans, bottom-up analysis of historical profit by style, and planning of future style assortments by season or individual marketing promotion. Our Page Analysis product helps companies with catalog or other print marketing to measure space allocations with a drag-and-click tool and display page and style profit metrics on-screen with the image of the printed page.
Q. What do “top-down” and “bottom-up” planning mean at Direct Tech?
A. These are terms we learned from our customers. They typically plan at two levels – a high-level, often a product category, where the head of merchandising or inventory sets business expectations. We call this top-down planning. This serves as both a financial budget and as a guide for lower-level planning. The lower-level planning is usually done at the individual product or style level, and it is done by the merchants, merchandising planners and inventory planners. They will develop demand, inventory, and profitability plans by style and then compare the sum of the bottom-up plans with the top-down plans as checks-and-balances for the business. Our Merchandise Assortment Planning System product includes both top-down and bottom-up planning features for merchandising, and our Demand Planning solutions provide both views for inventory planning and purchasing. Additionally, our Open-To-Buy product provides a top-down financial view of inventory and sales.
Q. How does Direct Tech software impact sales and profits?
A. In many ways. Our Merchandise Analysis products increase sales through smarter style assortment planning and improve profitability through profit metric analysis and forward planning. Our Demand Planning and Inventory Optimization products improve forecast accuracy and inventory scheduling, leading to higher customer order fulfillment, higher gross margins through lower overstocks, and better cash flow driven higher inventory turnover. The access to information and reporting throughout our software makes for overall better and faster decisions, improving both sales and profits.
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