Organizations with large inventory operations work with multiple levels of supply. Central sites purchase and stock most of the items. Slow-moving and less important items can be sent quickly to remote sites when needed, while fast-moving items are stored closer to the customer to enable more rapid customer service.Read More
Inventory Planning Blog
Up to now, you have relied on spreadsheets and reports and maybe a basic or old business management system. You know mistakes have been made, costly ones that cost you both in cash and in losing customers. There is no IT department in-house to help you determine if a new ERP or Accounting solution is required or an inventory forecasting solution or maybe a more advanced inventory planning and optimization solutions.
So, you sit there and consternate on what to do. What move to make next. Time passes, months go by and still you are in the same position facing the same but growing issues and decisions. Does it really matter that you are maintaining the status quo? The business is doing Ok. It could be doing better but you are so busy there is no time to stop and think.
Well, this lull in decision making is costing you a lot more than you think. Every day that you delay in upgrading your business processes and software solutions costs you, time, money and customers. Today ERP systems like NetSuite, SAP Business One, Sage and a host of others really do make a difference. They help to provide the visibility and data required for quicker, more correct decisions. NetSuite, for example, is a hosted cloud-based solution which makes it affordable and fast to implement requiring no additional hardware and IT support in your company.
Augmenting those systems are the modern advanced inventory planning and optimization solutions. Many are seamlessly integrated into these systems making them a richer, more intelligent system and one that is easier to implement. A few of truly cloud-based built more the ground up taking advantage of modern tools and technologies.
Basically, advanced inventory planning and optimization solutions automate the entire inventory planning process. These systems automatically import data from the master system, generate a forecast, optimize the inventory and create inventory replenishment requirements. Optimization is very important because it balances inventory investment with customer service levels. It makes the hard decisions for you and presents the data in easy to understand formats.
You can save a lot of time and money, reduce overstocks and avoid buying more of the wrong items. It will impact your bottom line cash flow and help increase your competitive advantage. All really good things and all you need to do is unfreeze yourself and make the decision to get your business software up to date. Procrastination is easy telling yourself tomorrow is the day. Doing can be just as easy!
Web-based demand planning and optimization products help companies reduce costs, increase productivity and offer a very quick ROI. In concert with a cloud-based ERP system like NetSuite, provides the users with an automated easy to use product. Planning and managing any inventory is a serious challenge and one that can be rewarding if done correctly and efficiently. Automation of the entire planning process from forecasting to replenishment to optimization and analytics is critical in order to keep up with the changes in demand and supply.
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.
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.
Danger Ahead! Inherent Challenges When you Need to Combine MRP & DRP Inventory Planning
Achievable Bottom Line Results
WAYS TO IMPROVE REPLENISHMENT PLANNING
Intelligent replenishment inventory planning includes several components, of which forecasting is just one element. Complete, automated planning systems handle all behavior including low volume items as part of a total process. Advanced planning solutions also incorporate inventory optimization, which dramatically improve replenishment planning. Why? Because optimization considers the wild cards in planning. It considers how random the demand of an item is, i.e., standard deviation and service level objectives, and it does it for each item, at every location, leaving nothing to chance (no spreadsheet can do that!)
THREE COMMON SENSE APPROACHES TO INVENTORY 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.
STEPS IN THE PLANNING PROCESS
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.
What state is your business in?
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 and are generally not affordable or usable by SMBs.
In the vast majority of SMBs, spreadsheets are the common tool in use. They are time-consuming to build and maintain, are usually static data repositories, and according to a prior study by a major consulting firm over 90% of them contain significant errors. But they do serve a purpose. Inventory-laden companies like manufacturers, wholesalers, retailers, and aftermarket service organizations often see that inventory is their largest asset. The cost of carrying excess and obsolete stock, as well as not having sufficient saleable inventory to meet demand is enormously high.
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
Every once in while, we like to toot our own horn. One of our newer customers, and a long time NetSuite customer, Inkjetsuperstore.com (www.inkjetsuperstore.com), recently shared their experience with implementing VALOGIX Inventory Planning V8 (our SaaS product).
"We are using the Valogix cloud-based application and it was a great decision. It allows me to do my planning anywhere, at any time and is a natural fit with our NetSuite applications," said Ilan Douek, President of Inkjetsuperstore.com.