Strategies to Optimize Inventory Management

Inventory optimization is the act of keeping the appropriate quantity of stock at all times in order to satisfy customer demand, limit the amount of money spent on logistics, and prevent typical inventory problems such as stockouts, overstocking, and backorders. Inventory can be a challenging aspect of your business depending on how volatile the market is. For optimized Inventory Management, there are a few strategies an organization can deploy.

1.    Use demand forecasting

If you have the appropriate resources and technology available to predict demand, you will be able to make better-informed judgments on supply, which will allow you to estimate the sum of the sales and revenue for a period of time in the future. The most significant data to have access to in order to estimate demand is historical order data since it gives insights into sales patterns. This data may be found in sales reports.When you have access to this kind of information, you are able to increase the efficiency of your supply chain, which in turn helps you save money and provide a better experience for your customers.

2.    Determine safety stock inventory

Safety stock, also known as "buffer inventory," is the surplus product that you have on hand in case of an emergency or supply-chain breakdown that causes less inventory to be accessible than usual.You will need the following for each stock keeping unit (SKU) in order to calculate the ideal quantity of safety stock that should be kept on hand:

·         Maximum daily usage

·         Maximum lead time

·         Average daily usage

·         Average lead time

3.    Carry out inventory audits

You may improve the effectiveness of your inventory tracking by conducting regular inventory audits and following standard processes for warehouse receiving. Holding costs, which include warehouse personnel, storage, inventory shrinkage, and depreciation expenses, should be carefully monitored and estimated so that severe inconsistencies may be avoided.

4.    Use a management solution with real-time data, like Anaplan.

Utilizing software that provides an accurate picture of inventory at all stages of the supply chain is one of the simplest and most expedient methods to enhance inventory management. A cloud supply chain planning solution, like Anaplan, will enable you to process the massive amounts of data necessary for essential tasks such as forecasting, stock replenishment, and planning for peak buying periods, among others. Working from the centralized cloud platform will also unify the organization's data and communication. By maintaining data in a single database, the finance, sales and marketing teams will be in sync with any significant changes to inventory, such as higher orders due to promotions and other one-time occurrences.

If you’re looking to optimize your inventory and stay ahead of the demands in this challenging market, visit www.accelytics.com to see how our experts can help.

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