Walmart Ammo Prices

[J. Scott Hanes]

Twenty-some years ago, with all the "private equity" involvement in the industry, the 'new thing' was 'just-in-time' policy. [That meant inventory levels also had to be at a minimum during the off season]

All the major big box stores had been clamoring for it for years. In order to adhere to such a strategy (producing just the right mix of product at just the right time) required sophisticated, highly accurate forecasting of need. That task was handed over to the Sales team who worked in conjunction with the customers to come up with "The Forecast" for the year. That also meant that manufacturing had to be able to build product inventories quickly.

Does anyone really know the future a year in advance? Of course not. And it was ignorance that expected anything close to accurate. During the course of the year that "Forecast" would be adjusted and that change, in turn, would cause manufacturing headaches either way.

The system is no better in the Firearms and Ammunition industry today because no one can predict all the variables that can go 12 months into the future. You either have too much or too little and often the season is past before all orders are filled. A manufacturer either has to build inventory over a year and 'hope' to get it right; then pay a ton in inventory tax (Wholesalers, too) or stick to the forecast, not meet it for various reasons, and just piss everyone off. No way to win the battle unless you make "widgets" which take minimal time to adjust production and you have huge excess capacity. The F&A industry is not built that way.