The Part One of Inventory Forecasting covered an overview to inventory forecasting and the techniques available. This post continues to review the approaches to inventory forecasting.Read More
Inventory Planning Blog
Tags: Forecasting Inventory
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 are 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.
Most of these solutions include a forecasting capability either their own platform or from an included third-party provider. They usually also offer min and max levels, safety stock and replenishment calculations. Most require you to manually set replenishment levels and have you select the appropriate forecast method.
But how many offer real inventory optimization and why is this important? There are many reasons why inventory optimization is critical for conducting business in today’s ever challenging economic climate.
First of all, what is the cost of carrying, holding and managing an inventory? The costs for most items are steadily increasing, real estate costs and taxes are up and shipping costs are through the roof. Inventory optimization provides a great balanced inventory to meet expected demand, while reducing costs and better controlling spend for additional stock purchases. Planning in a timelier manner reduces the need for expediting orders in from vendors, which in-turn reduces the need for expediting shipments to customers!
Secondly, optimization dramatically improves the financial performance of an inventory because buying and stocking are more in-line with expected customer demand. It helps to reduce and almost eliminate the future build-up of excess inventory and dead stock.
Third, there are too many known and unknown variables that can affect your inventory and subsequent customer service levels to manage properly. Just forecasting and planning your inventory leaves you wide-open to problems in meeting both your financial goals and customer expectations. Trying to plan with spreadsheets is even a worse situation that will eventually lead you to higher costs and lower service producing a higher level of customer dissatisfaction and lost business.
Discover an affordable, seamlessly integrated inventory planning optimization solution to SAP Business One for small and midsize businesses. A solution that frees up your resources (including cash), reduces losses from obsolescence, and increases service levels. The tools you need to forecast, plan, and optimize inventory, manage your business more efficiently and meet the demands of customers and suppliers are powerful and affordable.
Tags: Inventory Planning, SAP, SAP Business One, inventory optimization, Forecasting Inventory, advanced inventory planning solutions, cloud computing, Demand Planning, replenishment planning, Wholesale Distribution, Supply Chain, Partner Awards, Valogix, inventory management
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.
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.
Did you know that certain inventory planning solutions are easier to use than ever? Until recently Small and Mid-size Businesses (SMB) did not have affordable, easy to use software tools to help them effectively manage and balance their inventory investment. Software solutions that forecast, plan and optimize an inventory are found in widespread acceptance in large enterprise companies but these solutions can cost between hundreds of thousands to millions of dollars, take months to implement and are generally not affordable or usable by SMBs.
Tags: Inventory Planning, SAP, inventory optimization, Forecasting Inventory, optimization, cloud computing, NetSuite, Demand Planning, replenishment planning, Wholesale Distribution, Supply Chain, inventory management
If you're still using spreadsheets of yesteryear to plan your inventory, you are doing too much work. Constantly updating spreadsheets and trying to remember where you made changes leads to errors, resulting in stock outs and over-stocks – and costs you time and money.
In our final installment of our series on The State of Inventory Planning, we explore the results of inventory planning and optimization solutions. Companies that implement these solutions often find the results surprising. Many thought their old Excel spreadsheets were doing a fine job, only to discover a whole new world of information at their fingertips, allowing them to make informed decisions that really do affect the bottom line!
In our fourth installment in our series, we explore ways to improve replenishment planning.
How should a planner set the reorder point and reorder quantity (or order-up-to level) for thousands of items, perhaps at multiple locations? Due to the absence of an ‘intelligent’ planning system, three commonly used approaches have been Brute Force Review, Economic Order Quantity, and Periods of Supply, usually done in spreadsheets.
Companies approach their inventory planning in many different ways - from seat of the pants guessing, team collaboration, and spreadsheets. More and more companies are using forecasts either developed in-house or off-the-shelf forecasting packages.
In this Sunday's Schenectady Gazette, Dean Poeth wrote in his Op Ed piece entitled, It's Not Easy Going Lean: Manufacturers must cut waste and inefficiency to survice financial debacle, "For a small manufacturer, [lean manufacturing] is not an option, it is a business imperative." He likens the small manufacturer's fight to stay afloat to Rocky's championship fight strategy - simply stay on your feet and go the distance.
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.
Most recently, they implemented VALOGIX to an existing customer who has been live on SAP for about a year. "Our customer, an importer of starch-based, biodegradable utensils, cups and other picnic wares, was at a point where they needed to add head count in order to keep up with their forecasting and replenishment processes. The manager travels extensively and was finding it a challenge to make good decisions because of lack of access to information," Davis adds. "She needed a system that gave her up to date information and was simple to understand. She needed a decision-making tool that provided her with information she knew she could trust."