Introspecting about Inventory -Inventory Management

Select business owners from across India discuss demand supply issues, inventory-related problems and the way forward, post lockdown with R Sugandha

Post By : IJ News Service On 12 June 2020 1:59 PM

Gems and jewellery sector in China, Hong Kong, and the USA is showing some green shoots, but India is still feeling the heat of the situation and isn’t showing major signs of recovery.

All the same, worries about day to day operations and whether artisans will return to work in time, will they be able to meet the expectations of their clients and new government norms, etc are problems that they cannot seem to escape.

Demand-Supply Situation
Many corporate houses have laid off part of their staff, they have also asked existing personnel to accept pay cuts, in this scenario per capita disposable income has reduced considerably. In addition, gold prices have rocketed like never-before. As a result, demand for gems and jewellery is likely to reduce considerably.

Jewellery retailers, present a different viewpoint. According to Anil Kataria,DP Jewellers, Indore, “Those who have weddings and other important functions planned in their families, will come forward to buy gold.” There’s truth in his words, which are based on years of business experience and having survived several economic downturns.

“People may cut down on spending on other luxury goods, like high fashion, or expensive cars, etc -- but father of the bride will always gift his daughter lots of gold on her wedding day, because it is an investment, which she can fall back on, anytime in life,” he explains.

All said and done, life may not be the same again after the pandemic, “The pandemic will force gems and jewellery retailers to adjust to a whole new normal – ways of conducting business will have to change,” opines A Shivaram, founder of www.retailgurukul.com.

The experienced consultant feels that many old world business techniques – like waiting for customers to walk in and simply following government norms, without any additional effort to woo customers will lead to retailer losing his clients to his competitor. “World over businesses are feeling the impact of economic slowdown, turning a blind eye to reality is of no use,” he asserts.

People may cut down on spending on other luxurygoods, like high fashion, or expensive cars, etc -- but father of the bride will always gift his daughter lots of gold on her wedding day, because it is an investment, which she can fall back on, anytime in life Anil Kataria, D P Jewellers, Indore

Attract customers, increase demand
Efforts to attract customers have to made. “During the lockdown itself, many retailers had started sending Whatsapp messages, SMSes and later calling up their clients to enquire about their wellbeing and extending their best wishes,” informs A Shivaram. These are ways to let the client know that you are thinking about them. It is a way to connect and reach out to them.

Many business owners were also in touch with their associates. They were attending several Webinars, some were conducting such Webinars and making good use of the internet to network with industry experts.

According to Avinash Gupta, Mamraj Musaddilal Jewellers, Hyderabad, “I kept myself busy throughout the day, we used to conduct daily meetings with our staff, who were calling up business associates and clients. I have attended many Webinars and I believe all that has helped me meet the situation after lockdown
much better.

These meetings and Webinars provide reminders of protocols to be followed soon after lockdown is lifted. They keep jewellers in touch with suppliers and clients and the interaction strengthens business bonds.

Especially, with a pandemic so grave in its proportion the whole perspective on life and business changes and one starts appreciating certain aspects which may earlier have been taken for granted, like: health, dietary habits, exercise, lifestyle, family, et al. In business: client wellbeing, staff welfare, and such others. It surely allows an individual to evolve.

The pandemic will force gems and jewellery retailers to adjust to a whole new normal – ways of conducting business will have to change A Shivaram, Retailgurukul

Inventory matters
Being over stocked or under stocked in the post lockdown situation can prove disastrous. If a jeweller is over-stocked, meaning he will have locked up valuable liquidity – which may or may not get monetized in the long run. “Consumer demand is often quite treacherous. Today they like to buy heavy jewellery, but post lockdown, they may go in for light weight pieces, in such a case, your heavy jewellery stock will remain unsold. Therefore, it is advisable to liquidate it as soon as you find the right opportunity,” explains Gupta.

Given, the upcoming economic slowdown, buyers may prefer light weight jewellery, feel industry analysts. Therefore, it is advisable to keep new stock of light weight pieces on display.

In case, a jeweller is under stocked, he may find it expensive to buy new stock. “In such a case, he may have to avail bank credit or share inventory via an app or with the help of a virtual platform, to show inventory from his branches or talk it out with his suppliers if he can show goods, which suppliers have in stock, to his walk-in customers,” explains Vicky Badera, Panchkesari Badera Jewellers, Bengaluru. In that way, he can minimize outright purchase of stock, which currently will be quite expensive – given the high price of gold.

Jewellers may have to avail bank credit or share inventory via an app or with the help of a virtual platform, to show inventory from his branches or talk it out with his suppliers if he can show goods, which suppliers have in stock, to his walk-in customers Vicky Badera, Panchkesari Badera Jewellers, Bengaluru

 

Inventory matters
Being over stocked or under stocked in the post lockdown situation can prove disastrous. If a jeweller is over-stocked, meaning he will have locked up valuable liquidity – which may or may not get monetized in the long run. “Consumer demand is often quite treacherous. Today they like to buy heavy jewellery, but post lockdown, they may go in for light weight pieces, in such a case, your heavy jewellery stock will remain unsold. Therefore, it is advisable to liquidate it as soon as you find the right opportunity,” explains Gupta.

Given, the upcoming economic slowdown, buyers may prefer light weight jewellery, feel industry analysts. Therefore, it is advisable to keep new stock of light weight pieces on display.

In case, a jeweller is under stocked, he may find it expensive to buy new stock. “In such a case, he may have to avail bank credit or share inventory via an app or with the help of a virtual platform, to show inventory from his branches or talk it out with his suppliers if he can show goods, which suppliers have in stock, to his walk-in customers,” explains Vicky Badera, Panchkesari Badera Jewellers, Bengaluru. In that way, he can minimize outright purchase of stock, which currently will be quite expensive – given the high price of gold.

Jewellers, who are understocked can buy gold from their customers, who are likely to come forward to sell gold, which is now fetching them a good price. The rate at which jewellers buy gold from individual customers is much less as compared to that at which they sell gold. So jewellers have not reason to worry on this front.

Mumbai is currently under total lockdown, our karigars have gone to their villages, they may return when lockdown is lifted, however they haven’t made any such promises. Chetan Thadeshwar, Shringar House of Mangalsutra Pvt Ltd, Mumbai

New business practices
In addition, to government prescribed new protocols which every business will have to follow, it is advisable that jewellers start maintaining an updated database of their clients. It will be handy, when they announce various schemes to attract customers. “Post lockdown, every jeweller will come out with newer discount schemes, or SIPs or gold investment schemes, to attract customers,” explains A Shivaram.

Such schemes are important – at the same time, old practices of opening stores and waiting for customers to walk in will not work. Jewellery business owners will have to find ways to invite customers into their stores. “They may have to participate in social events, conduct competitions, or events or invite important people into their store, so as to increase footfall,” informs Badera. Jewellery retailers will have to make an extra effort to create demand for their products. They will have to be innovative and make use of online and offline marketing and branding ideas to attract customers.

Manufacturing Segment
Manufacturers have yet another battle of their own. Their artisans have gone back to their native places. Their orders have to be delivered in time, and logistical companies haven’t opened up. With government allowing only those diamond manufacturers, who need to complete their earlier export orders to operate with just ten percent manpower, the situation is indeed challenging. “Mumbai is currently under total lockdown, our karigars have gone to their villages, they may return when lockdown is lifted, however they haven’t made any such promises,” informs Chetan Thadeshwar, Shringar House of Mangalsutra Pvt Ltd, Mumbai. They are yet to complete orders placed before lockdown. They have asked for a deferred delivery date for these orders. Money is stuck with clients, as most of the business is conducted on credit. If artisans fail to return in time, and orders get piled up, manufacturers may have to raise wages and get work done from existing number of workers. It is therefore, very important that the artisans return in time. “Also, some manufacturing units in Mumbai have space constraints, so it may be a challenge to rent out or arrange for spacious manufacturing units in the city,” explains Pramod Mehta, Shine Shilpi.

Some manufacturing units in Mumbai have space constraints, so it may be a challenge to rent out or arrange for spacious manufacturing units in the city. Pramod Mehta, Shine Shilpi, Mumbai

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