Inventory Planning Blog

The challenge facing people and companies is they must work steadily at improving their inventory management. In order to improve, you need to know where you are today. First, is to determine what they have accomplished and how competent they are in their planning. Their level of experience and results must be measured to accurately and efficiently move forward.

Part 1 of our Inventory Forecasting blog, covers an overview to inventory forecasting and the techniques available. This continues to review the approaches to inventory forecasting.

Forecasting customer demand is an important and necessary part of the chain of calculations needed to optimize inventory stocking levels. There are a wide variety of techniques that can be used, making forecasting a confusing and sometimes difficult process. If your goal is to not only forecast demand but also stock inventory at optimal levels, then forecasting must be combined with inventory planning and replenishment optimization algorithms to reach the goals of higher service levels with less inventory.

There are some distinctions of business purchases, strategic and non-strategic. Strategic purchases are those that have a direct effect on the business and the bottom line. Non-strategic are those for everyday items like office supplies, travel, commodity items, etc. In the case of manufacturing companies, strategic purchases can be raw materials, production equipment, energy, skilled labor, computers, and business operating software.

ERP on-board inventory management software offers some inventory management, manufacturing, and purchasing capabilities. However, they are not deep in functionality and do not provide true inventory optimization algorithms. Some do have available multiple location capabilities but again depth and breadth of functionality is limited. Lots of manual work is required to make these systems work as needed.

Your mission to be the best supplier of your products in the market today and tomorrow is more challenging than ever. Most companies define what that means in terms of serving the customer. For example, your customers can send you an order and get a return confirmation promptly. You will ship all orders within 24 hours. You will offer a variety of products that is both broad and deep. All great goals to build and grow a business. Now, you go out and spend a ton of money on the inventory.

                                               Feb 2022 Blog

When it comes to inventory forecasting and planning,COVID-19 is presenting a serious challenge. Cases range from plummeting sales to unprecedented peak sales and to longer lead times, to unavailable stock.

Further, the general consensus at the moment, is that the immediate impact as described above will be followed by either an upturn or return to more normalized levels and a gradual return to available stock. Then, there is the unknown question of if the virus will return in the fall/winter and what kind of impact will be felt then. If it becomes an endemic virus, meaning its here to stay like the flu, what then?

Key Words you should know:
Supply chain – logistics – digital transformation – optimization – evolution – innovation

Changes are occurring at lightning speed for all of us today. Consumers and companies alike have to contend with minute-by-minute information and change. The Cloud – Advanced Inventory Planning – Omnichannel – Social Media and much more impact today’s businesses. The options dazzle the mind, do we stay the course or change a little or change a lot.

Signs of a slowly improving global economy are starting to become apparent but far from robust. Consumers have a pent-up need to spend the cash they have amassed. But, production in the Far East is trying to catch up to this demand. Then, there is the massive shipping backlog and serious shortage of truck drivers. Experts suggest these adverse conditions could last well into late next year and possible the following year as well.

Unique and unforeseen events are forcing every business manager to better analyze and utilize their resources. This includes capital, staff, facilities, vendors and more. Especially difficult as we emerge from the COVID lockdown is personnel. If you can’t add staff or find qualified people to fill open positions, you need to increase your existing productivity to compensate. And you need to do it fast. Want to do more inventory planning with the resources you have? Or maybe you need to move a person to another critical department but that would mean not being able to plan your entire inventory.

Most product companies understand they have gaps in their supply chain data that hinder their ability to meet critical demand. One of the largest gaps lies between supply and demand planning and a company’s supplier network, making many companies hesitant to adopt supply and demand planning software within their ERP.

SourceDay’s latest partnership with Valogix, an advanced inventory planning software company, now bridges that gap for NetSuite users.

NetSuite holds the necessary data to make intelligent and actionable decisions for manufacturers, distributors and retailers. Valogix provides advanced intelligence in the supply chain of what companies need based on sales orders, forecasting, inventory, cancellations, etc. and automatically creates a purchase order (PO) within NetSuite to meet demand.

​What COVID-19 has taught us is that change is constant, unforeseeable, and sometimes very disruptive.We need to take a moment to consider where we are and where we need to go. The future is coming fast. Change for change’s sake and the status quo are no longer relevant. In fact, these attitudes are detrimental. Smart innovativethinking and planning are the new norm.

Valogix Customers Tell Their Story During COVID – Part 2

Inventory planning is going through a dramatic upheaval due to COVID-19. Moving forward in time, each new history month provides one more piece of data to help determine the direction of things and how it may vary across your products. Each day/week/month things are changing. Your sales and management team may have further insight to where your immediate customers think things are going. Management may have to curb spending. Things may have happened to your competition that impact your stocking strategy. The end result of your analysis should be an inventory plan or strategy, so that you can best decide how to use the tools you have available.

The COVID-19 Pandemic is presenting a serious challenge when it comes to inventory forecasting, planning and replenishment. Cases range from plummeting sales and closed businesses to unprecedented peak sales, to extended lead times, to short or unavailable stock and raw materials. Further, the general consensus at the moment, is that the immediate impact as described above will be followed by either an upturn or return to more normalized levels and a gradual return to available stock. Then, there is the unknown question of if the virus will return in the fall/winter and what kind of impact will be felt then.