Slowly improving global economies have added some additional stress to sully chains. The risk of disruption is higher now than in the past. In these challenging times, it is important to balance short term resilience with longer term needs. You will hear a lot about reducing costs, buying less, increasing productivity, improving cash flow and more. It is important to keep these inventory objectives balanced and in perspective.
On reducing inventory investment, many companies have tended to reduce the items with the highest investment because it creates a larger reduction faster. However, what it also does is lead to stock outs, higher backorders and increased expedited shipping. All of these can create an even bigger problem: customer dissatisfaction. When customers are dissatisfied, they become former customers. Randomly cutting inventory has been proven, time and time again, to be the wrong strategy as does overstocking your inventory. Companies use collaborative forecasts to help better pinpoint demand, yet the techniques for the individual forecast may still be guesswork and gut-feel.
Now, more than ever, you have a lot of choices for improving your inventory investment. The Cloud is a viable alternative to investing in On-Premise inventory software. Software-as-a-Service provides an affordable way to utilize some of the most powerful inventory planning solutions on the market.
Why should you be interested? SaaS applications provide many benefits you just cannot achieve on-premise. Benefits include:
Lower upfront capital: By going to a SaaS model, you avoid the up-front capital requirements and funding requests, and pay for the software as an on-going expense.
Faster implementation: There is generally less overall set-up time, and in some cases, companies can often leverage the hosted solution’s existing integrations with existing key ERP solutions.
Faster “time-to-value”: Given a more rapid implementation, the time-to-value and positive cash flow returns are more rapid than a traditionally deployed on-premise implementation.
Reduced internal IT resource requirements: No installed application software or hardware to manage over time.
Overcome objections to best-of-breed software: Some companies are finding that they are able to overcome the objections or rules against implementing software that does not come from the company’s ERP provider if they use a SaaS model.
Fit for “on-demand” usage: Users can truly access these solutions when they need them anytime and anywhere 24x7.
Staying current with technology: The software will periodically be automatically upgraded with enhancements to functionality. This should serve to keep users on the current platform, and keep them from falling behind the state of the art over time, sometimes badly so.
So, before you wait another moment, do yourself, you employees and your customers a favor and take a serious look at Clod based inventory planning and optimization solutions.