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.
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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.
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Tags: cloud, inventory optimization, SaaS
The performance gap between customer experience leaders and runners-up is widening, with those on top being disproportionately rewarded. Gartner Inc. said organizations must ignore three myths in order to achieve a superior customer experience.
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Tags: cloud
But not for primary forecasting and replenishment planning
Reports and spreadsheets should be used to provide a basic level of information. However, many companies and planners use reports & spreadsheets to completely manage their inventory. To understand the use of these tools on effectiveness and efficiency in inventory planning let’s explore each one independently.
Reports
Many ERP and accounting systems have many standard reports that provide useful information. Usually, however, a company will create or build custom reports either in-house or through their 3rd party IT provider (Value Added Reseller – VAR). OK, so this may help because it provides a level of detail that a company or planner feels is necessary to better manage the inventory.
Assume your outside IT firm builds the report. It costs $5,000 to develop. Let’s also assume it is refreshed, updated, each day. Now what? This is static data and yes it is current but it just sits there and provides no efficiency for the planner. The planner must review and decide what the data suggests and what to do with the data.
But the real cost is much higher than the cost to develop the report. Every report, like spreadsheets must be maintained. Much like a car, the purchase price is just the beginning. Hours of a planner’s time are spent pouring over the results to make decisions. You need to count those hours as an associated cost. So, if a planner is paid say $45,000 per year, plus taxes and benefits the total annual cost is over $50,000. If 35% of a planner’s time is spent reviewing just the reports to manage the inventory, then the first year cost is $5,000 + $17,500 = $22,500. That is some expensive report. Are you getting your money’s worth? You still may not be done.
Most people who have reports will export the data from the report into a spreadsheet so they can better manipulate the data. Here is where the fun comes in.
Spreadsheets
The data from the report is now in the spreadsheet that you spent countless hours creating. The formulas in the cells calculate the numbers you need to evaluate your inventory and plan out the replenishments required.
The dangers inherent in spreadsheets are:
1. Lack of Control
2. Errors from:
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Tags: cloud, replenishment planning, forecasting, reports, Valogix, Spreadsheets
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 40 year old plus, 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.
What Inventory Management Software can do:
• keep basic part information like: part number, description, cost, dimensions, etc.
• track parts movement: received, on order, on shelf, removed from the shelf, etc.
• provide a basic reorder point and min/max settings
• record the different bin locations where parts are stored
• provide an order for new parts needed, using standard reorder point, min/max, and safety stock
What Inventory Management Software cannot do:
• provide a system generated forecast or offer multiple advanced forecasting methods
• manage repair parts and their repair cycle (reverse logistics)
• provide an optimal inventory mix to improve service level while reducing cost
• offer multiple stocking and reordering policies
• manage parts specifically required for PM (preventative maintenance) schedules
• help to reduce overstock and excess part inventory
• manage by exception and provide key user alerts.
What Advanced Inventory Planning Solutions CAN DO:
• forecast parts demand with multiple models appropriate for different demand patterns
• plan for unlimited part and location combinations (scalable)
• provide advanced calculations for calculating shelf stock and reorder points
• calculate the optimal mix based on dynamic demand changes
• provide time phased plans and order for both new and repair items
• manage by exception and provide alerts to the planner
• identify overstock and excess inventory and provide redeployment strategies
• plan parts for preventative maintenance schedules
• multi-echelon or theatre planning - can plan at every stocking level both real and virtual
(from master warehouse to stock kept with a field or service engineer)
• plan part life cycle, substitutes and supercedes, and end-of-life parts
Combining Transaction Systems + Advanced Planning Solutions
Advanced planning solutions do not replace the existing transaction systems. Instead, they are designed to complement and improve existing software. The best of all worlds is to add an advanced planning solution to an existing transaction system. This provides a more complete, robust system that dynamically plans based on what is happening now and projected for the future. Download our free whitepaper to find out more!
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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 40 year old plus, 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.
What Inventory Management Software can do:
• keep basic part information like: part number, description, cost, dimensions, etc.
• track parts movement: received, on order, on shelf, removed from the shelf, etc.
• provide a basic reorder point and min/max settings
• record the different bin locations where parts are stored
• provide an order for new parts needed, using standard reorder point, min/max, and safety stock
What Inventory Management Software cannot do:
• provide a system generated forecast or offer multiple advanced forecasting methods
• manage repair parts and their repair cycle (reverse logistics)
• provide an optimal inventory mix to improve service level while reducing cost
• offer multiple stocking and reordering policies
• manage parts specifically required for PM (preventative maintenance) schedules
• help to reduce overstock and excess part inventory
• manage by exception and provide key user alerts.
What Advanced Inventory Planning Solutions CAN DO:
• forecast parts demand with multiple models appropriate for different demand patterns
• plan for unlimited part and location combinations (scalable)
• provide advanced calculations for calculating shelf stock and reorder points
• calculate the optimal mix based on dynamic demand changes
• provide time phased plans and order for both new and repair items
• manage by exception and provide alerts to the planner
• identify overstock and excess inventory and provide redeployment strategies
• plan parts for preventative maintenance schedules
• multi-echelon or theatre planning - can plan at every stocking level both real and virtual
(from master warehouse to stock kept with a field or service engineer)
• plan part life cycle, substitutes and supercedes, and end-of-life parts
Combining Transaction Systems + Advanced Planning Solutions
Advanced planning solutions do not replace the existing transaction systems. Instead, they are designed to complement and improve existing software. The best of all worlds is to add an advanced planning solution to an existing transaction system. This provides a more complete, robust system that dynamically plans based on what is happening now and projected for the future. Download our free whitepaper to find out more!
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Tags: Inventory Planning, cloud, inventory optimization, web based inventory software, cloud computing, Demand Planning, replenishment planning, Spreadsheets
The vast majority of companies that own an inventory invariably use spreadsheets to control, manage and report. The types of companies vary from manufacturing, to wholesale distribution, to retail, to aftermarket services, to maintenance and repair operations. And this is true geographically and for companies from the very small to the largest. So why the fascination with spreadsheets?
I most cases, companies already own the software as part of a suite or as already installed on the computer they purchased. They are relatively low cost and have an abundance of features that make them attractive. It is also a case of “you don’t know what you don’t know”. Meaning, people are unaware of the availability of easy to use affordable, automated inventory planning software.
The dangers inherent in spreadsheets are:
Lack of Control
Errors from:
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Tags: Inventory Planning, cloud, inventory optimization, SaaS, Valogix, Spreadsheets
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Tags: Inventory Planning, cloud, inventory optimization, SaaS, optimization, Valogix
Reports and Spreadsheets– An Unproductive Combination for Inventory Planning
Reports and spreadsheets should be used to provide a basic level of information. However, many companies and planners use reports & spreadsheets to completely manage their inventory. To understand the use of these tools on effectiveness and efficiency in inventory planning let’s explore each one independently.
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Tags: Inventory Planning, cloud, web based inventory software, NetSuite, Supply Chain Managment, IBM, mistakes, Spreadsheets
Cloud Applications Going Forward
Advances in technology have allowed previous concepts like Time-Sharing and Shared servers and services to become a reality. Cloud computing today has real meaning and positive impact for companies in a true global economy. The future is that more business applications for mobile computing will be available and virtual software appliances will be developed.
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Tags: Inventory Planning, SAP Business One, cloud, inventory optimization, SaaS, NetSuite, IBM, Sage, Valogix
Why it pays to invest in inventory solutions
There are many reasons or excuses for not upgrading to a modern, easy to use advanced inventory tool. Which Category do you fall in?
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Tags: Inventory Planning, SAP, cloud, SaaS, Demand Planning, Valogix, inventory management
Advanced inventory planning and optimization software in the cloud not only automates the entire planning process, it dramatically increases the positive cash flow of a company. By smartly reducing inventory investment, reducing stockouts, decreasing expedited shipping costs, and reducing planning time all contribute to more available cash. Add to that increased sales and productivity and the gains will also lead to an improved competitive advantage.
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Tags: Inventory Planning, cloud, inventory optimization, SaaS
Section 179 Investment Tax Incentive – 2012 – US Only.
In these challenging economic times, it is important to make use of every tool available to cut costs and improve after-tax profits. You may have the ability to deduct a large percent of your investment in IT, meaning hardware and software purchases made by December 31, 2012.
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Tags: Inventory Planning, cloud, inventory optimization, SaaS, Valogix
Web based inventory software for business is becoming more plentiful. Solutions specifically built for the web are in great demand around the world. Take for example, Australia and New Zealand, which are experiencing not only increased demand but an increase in the number of available web based inventory software applications.
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Tags: cloud, SaaS, web based inventory software, Valogix, Inventory Planning Solutions
Happy New Year! 2012 brings the promise of improving global economies. Balancing short term resilience with longer term needs is what is needed now. Reducing costs, buying less, increasing productivity, improving cash flow is important, and to keep these inventory objectives balanced and in perspective you need an efficient way to optimize these important business demands. Improve your competitive advantages responsibly and efficiently with inventory planning optimization solutions. Waiting until its too late in your ordering cycles will invite your customers to investigate other opportunities, and that can happen by making the reduction of the wrong item at the wrong time.
If your company tends to reduce items with the highest investment because it creates a larger reduction faster, what it actually does is creates potential stock outs, higher backorders and increased expedited shipping – and, even more importantly, customer dis-satisfaction. We all know that when customers are unhappy they become former customers. Randomly cutting inventory has been proven time and time again to be the wrong strategy as does overstocking your inventory.
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Tags: Inventory Planning, SAP Business One, cloud, inventory optimization, SaaS, Forecasting Inventory, advanced inventory planning solutions, replenishment planning, IBM, Wholesale Distribution, Supply Chain, manufacturing
There are a lot of inventory planning solutions available from all types of companies around the world. Many are designed for large enterprise companies as they cost hundreds of thousands of dollars and are highly complex. Some so complex a math or science degree is required just to operate the system. Others at the low end may be just point solutions for just forecasting, as an example, or offer individual modules you need to buy separately.
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Tags: cloud, inventory optimization, Forecasting Inventory, Supply Chain, inventory management