Did you know that certain inventory planning solutions are easier to use than ever? Until recently Small and Mid-size Businesses (SMB) did not have affordable, easy to use software tools to help them effectively manage and balance their inventory investment. Software solutions that forecast, plan and optimize an inventory are found in widespread acceptance in large enterprise companies but these solutions can cost between hundreds of thousands to millions of dollars, take months to implement and are generally not affordable or usable by SMBs.
Inventory Planning Blog
Tags: Inventory Planning, SAP, inventory optimization, Forecasting Inventory, optimization, cloud computing, NetSuite, Demand Planning, replenishment planning, Wholesale Distribution, Supply Chain, inventory management
In our final installment of our series on The State of Inventory Planning, we explore the results of inventory planning and optimization solutions. Companies that implement these solutions often find the results surprising. Many thought their old Excel spreadsheets were doing a fine job, only to discover a whole new world of information at their fingertips, allowing them to make informed decisions that really do affect the bottom line!
In our fourth installment in our series, we explore ways to improve replenishment planning.
How should a planner set the reorder point and reorder quantity (or order-up-to level) for thousands of items, perhaps at multiple locations? Due to the absence of an ‘intelligent’ planning system, three commonly used approaches have been Brute Force Review, Economic Order Quantity, and Periods of Supply, usually done in spreadsheets.
Companies approach their inventory planning in many different ways - from seat of the pants guessing, team collaboration, and spreadsheets. More and more companies are using forecasts either developed in-house or off-the-shelf forecasting packages.
In this Sunday's Schenectady Gazette, Dean Poeth wrote in his Op Ed piece entitled, It's Not Easy Going Lean: Manufacturers must cut waste and inefficiency to survice financial debacle, "For a small manufacturer, [lean manufacturing] is not an option, it is a business imperative." He likens the small manufacturer's fight to stay afloat to Rocky's championship fight strategy - simply stay on your feet and go the distance.
What's getting in the way of providing customer value in wholesale distribution? Most often, it's the inability to balance stock levels with service levels. Hold onto too much inventory, and you end up paying for items that collect dust in the warehouse. Stock too little inventory and you won't be able to keep up with customer requests. Sometimes wholesale distributors end up with both problems: holding excess stock of items customers don't need.
Most recently, they implemented VALOGIX to an existing customer who has been live on SAP for about a year. "Our customer, an importer of starch-based, biodegradable utensils, cups and other picnic wares, was at a point where they needed to add head count in order to keep up with their forecasting and replenishment processes. The manager travels extensively and was finding it a challenge to make good decisions because of lack of access to information," Davis adds. "She needed a system that gave her up to date information and was simple to understand. She needed a decision-making tool that provided her with information she knew she could trust."