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.
It is crucial to monitor and maximize inventory effectiveness, and investing in the right software solution is the best way to do this. Advanced inventory software solutions provide a way to improve a company’s inventory investment while maximizing profits and increasing sales. Advanced inventory planning solutions are known as decision support software. This means they are smart systems that forecast and plan optimal inventory requirements. They are superior to commonly used types of software; standard inventory transaction software and spreadsheets. Many of these solutions are both strategic and tactical tools. They cover long range inventory budget planning down to daily replenishment and problem solving.
Comparison to Spreadsheets
Spreadsheets are manual, time consuming. They do not provide intelligent part mix management and part specific forecasts. In addition, spreadsheets are extremely difficult to update and maintain current data effectively, plus they normally cannot be interfaced directly with enterprise and customer relationship software. Conducting quality assurance on the calculations and models is also difficult and based on a study by a leading international consulting firms over 90% of spreadsheets they audited contained significant errors. These errors led to the loss of millions of dollars.
Comparison with Standard Inventory Management other or Control Systems
Almost every inventory solution is a transaction (accounting) type system. This means they keep track of the physical movement of items on and off the shelf. These are “dumb” systems, meaning they are static and cannot intelligently determine what to stock, project demand, or create a complete replenishment plan. These systems are based on 50-year-old methods using ABC as the only part classification technique. They do not have leading-edge Exception Management capabilities which provide "alerts" to the User for unusually occurrences.
Advanced Inventory Planning – The Key to Your Customer Happiness Mission
First, a key part of a good strategy is to have good communications and relationships with your materials suppliers and manufacturers to get good prices and quality service on what you buy. You should negotiate prices with suppliers, check the quality of materials, and keep an eye on social and working conditions in their region. The goal is to insure you get the supplies you need, when you need them, at the price you feel is reasonable.
Who decides key inventory-related policy such as striking the right balance between customer service and cost-effective product inventory levels? Many decisions about inventory levels are strategically important. So instead of relying solely on the supply organization to decide, executives need to have a major say in the fundamental issues that impact inventory management—everything from determining the right breadth and complexity of product offerings to optimal plant and distribution footprints.