Inventory Planning Blog
Companies approach their inventory planning in many different ways - from seat of the pants guessing, to team collaboration, to spreadsheets that may invoke more team collaboration and manual changes, to forecasting software and some to advanced planning solutions.Read More
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.
Investing in smart solutions that improve your inventory planning is an important business decision and necessary in today’s global and troubled economy. Sometimes the concept of spending money to save money is very hard to accept. There are no guarantees the investment will pay off, so there is some level of risk involved. But, is it any riskier to do nothing? To maintain the status quo?
Cloud applications for business are becoming more plentiful. Solutions specifically built for the web are in great demand around the world. Companies are deciding to employ a cloud model to reduce capital and operational expenditure, reduce costs, increase business agility, and boost their ability to deliver IT on demand.
IDG News Service (Boston Bureau) March 27, 2012 — Global spending on SaaS (software as a service) will rise 17.9 percent this year to US$14.5 billion, according to figures released Tuesday by analyst firm Gartner.
The spending rise is attributable to greater familiarity with how SaaS works, growth in related PaaS (platform as a service) offerings, and IT budgeting considerations, Gartner research director Sharon Mertz said in a statement. SaaS products are typically sold via subscription, allowing companies to avoid large up-front licensing fees and capital costs.
North America is the most mature and largest SaaS market, expected to generate $9.1 billion in revenue this year, compared to $7.8 billion last year.
Western Europe's SaaS spending will generate more than $3.2 billion in 2012, up from $2.7 billion in 2011.
In the Asia-Pacific region, for which Gartner excludes Japan, SaaS revenue will jump from $730.9 million in 2011 to $934.1 million this year.
Japanese companies will spend $495.2 million on SaaS this year, compared to $427 million last year, Gartner said.
SaaS sales in Japan will be driven by CRM (customer relationship management) and collaboration software, "which already have actual demand," Gartner said. The 2011 earthquake has also raised interest in SaaS there as a possible defense against such natural disasters, according to the analyst firm.
SaaS spending in Latin America this year will be $419.7 million, compared to $331.1 million in 2011, Brazilian and Mexican companies will account for the majority of sales, with CRM, procurement and ERP (enterprise resource planning) applications the most popular choices, Gartner said.
Meanwhile, Eastern Europe, the Middle East and Africa remain "small and emerging markets overall" with "ongoing infrastructure challenges," Gartner said.
Overall, the market growth predicted by Gartner can be attributed to both pure SaaS vendors such as Salesforce.com, which is predicting it will reach close to $3 billion in annual revenue during its fiscal 2013, as well as increased emphasis on SaaS by dominant on-premises application vendors like Oracle and SAP.
Those companies recently spent billions to respectively acquire Taleo and SuccessFactors, which compete in the HCM (human capital management) market.
HCM is seen as an effective way for on-premises vendors to make inroads in the SaaS market. For one, many offerings focus on areas such as recruitment and learning and development. Those functions are adjacent to core human-resources functions like payroll, which are already handled at many companies by on-premises ERP systems.
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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.
Recently, Supply Chain Brain announced their list of reader-nominated, The 100 Great Supply Chain Partners. Over a six month period, supply chain and logistics professionals were asked to nominate their providers who made a significant impact on their company’s overall operational and financial bottom line. Below is the list of the qualities deemed most important in regards to the supplier relationships: