Maintaining that delicate balance between having enough inventory or having too much can have a bigger impact on your bottom line than you may think. Marketplace and economic conditions, as well as customer demands, can change on a moment’s notice and these variables can turn standard safety or buffer stock levels into a moving target. Take the guesswork out of inventory management by deploying stronger technology.
Many businesses try to avoid the hassle of back-orders by overstocking the warehouse. However, overstocking comes at a price. Investing too much money in inventory can lead to cash flow problems or under-investing in other strategic business areas. In addition, inventory could expire on the shelves, in certain cases, or could become obsolete as consumer demands change. As a result, you are stuck with inventory that you simply can’t sell. Getting closer to that moving target of safety stock and making more accurate forecasts could protect your cash flow and give you a little more room in your profit margins.
Replace outdated or inefficient inventory management systems with today’s more modern technology. Users of enterprise resource planning (ERP) solutions can add-on solutions from the PlanningEdge Forecasting and Replenishment Suite starting with the Demand Manager. The Demand Manager offers powerful forecasting and planning tools that use a proprietary statistical algorithm designed to meet the unique requirements of product-level forecasting. You can create forecasting scenarios based on product, customer, or regional requirements. The Demand Manager can also forecast multiple size/color combinations, consider seasonal needs, and you can switch between monthly, weekly, or other time frames. With this level of flexibility, you can consider all your options and make procurement decisions based on your business-centric or customer-centric goals.
Safety stock is often a moving target; however, with the right technology, you can get closer to your goals and be confident in what to buy, when, and in the ideal quantities. Carry only the inventory that is necessary to satisfy your customers and protect the bottom line, without needlessly overstocking the warehouse. Contact PlanningEdge to learn more about the Demand Manager and the other add-on solutions that can take the guesswork out of inventory management.
Posted on: October 6, 2017