Inventory Planning Blog

How Wholesalers Provide Value with Accurate Inventory Planning

Posted on Tue, Apr 27,2010@10:50 AM

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.

In any industry, compelling value propositions add up to hallmarks of success. In wholesale distribution, these include reliability, customer service and pricing. But when wholesalers aren't able to provide immediate value, they can find that customer patience wears thin quickly. That's where today's forecasting and demand planning solutions come in. With these solutions, small and midsized wholesale distributors can amplify value propositions-while cutting unnecessary operational costs.

Most of the major retailers and large industrial companies have pushed the requirements of inventory stocking back to the wholesale distributors. Yet many of these wholesalers still rely on manual planning processes incapable of meeting demand for multiple items in real time.

So how do forecasting and demand planning capabilities help address this problem? A forecast is really an estimation of what the future demand might look like-and it's usually based on a statistical model, algorithms that can use historic demand to calculate the future. Demand planning is a little broader; it's the lead time to get the items to the vendor, and also how long it might take to plan.

Want to learn more? Read the entire article in IBM ForwardView.

Tags: Inventory Planning, Forecasting Inventory, Demand Planning, IBM, Wholesale Distribution, SMB, Valogix