A company needs efficient inventory forecasting software to optimize its merchandising operation. The ability to track products more efficiently, organize things better, provide accurate data and reports, and increase warehouse productivity helps increase sales when the appropriate technology is in place.
Today, most businesses have the opportunity to enhance their operations, particularly in their warehouses, significantly. But if you don’t start modernizing and streamlining your business’s procedures, you might suffer from overstocking and have to bear high inventory expenses.
Your business’s profitability, standing, and levels of customer happiness could all gradually and discreetly erode due to inadequate inventory forecasting. Forecasting errors may result in out-of-stock issues. The products have all been sold out due to the tremendous demand, and you now need more inventory to boost revenues, which can enrage some customers.
By following some tips for inventory planning, you may sustain and operate an efficient business year after year with the appropriate methods and approach. You may monitor your sales and expected demand by looking at previous sales over a certain time. You can precisely manage your purchase orders and modify your current stock with robust inventory forecasting software.
Tips for Better Inventory Forecasting
Utilize Your Data
Data must facilitate precise inventory projection. Everything should be considered, including how long it takes to receive things from your supply chain and how much inventory is sold daily. This data must be gathered to determine supply and demand and prevent excess stock.
Before selecting when to place a reorder, you must understand how your inventory has historically changed. Future decisions should be based on information from your historical sales and inventory. Your inventory forecasting process can then be repeatable and consistent over the forecast period.
Technology and data are crucial for managing lead times for transportation requirements and enabling better demand planning to accommodate changes in the industry.
View Real-Time Stock Levels
To accurately anticipate future demand, you need accurate, timely data. Real-time inventory tracking enables you to monitor current stock levels at any given time and assess how accurate or inaccurate your predictions were. If they were wrong, look into the root problem. Knowing why this happened will allow you to adapt your forecast and use what you’ve learned in the past.
By maintaining accurate stock records, you can always know how much of a specific item you have when making a new order and other facts. Accurate stock records help you avoid carrying too much or too little of a particular item by supporting accounting, warehouse management, marketing, and other business sectors.
Have Safety Stock
If an item frequently sells out or is one of your best-sellers, have an extra supply to prevent stockouts. This will be helpful if demand rises or your current supply runs out.
Safety stock is offset by increased holding costs and the financial loss brought on by stock shortages and lost sales. A lot of businesses view safety stock as insurance. You’ll be glad you have it even though it costs a little extra because you’ll need it.
Utilize ABC Analysis for Categorizing Inventory
ABC analysis is a concept that has been introduced previously when it comes to inventory classification. Supply chain leaders can use ABC analysis made with inventory planning systems to understand better stock activities and how space use impacts overall cycle times and productivity.
By setting out your warehouse inventory according to how well it sells and how much value it brings to your business, you can maximize storage space and expedite order fulfillment.
Split Inventory into Different Categories
Our corporation views all the products and machinery employed in manufacturing as one huge, amorphous object known as inventory. As a result, inventory tracking could become challenging.
You can better manage your inventory planning concerns by categorizing your products. Grouping products into various categories makes evaluating the success of individual products easier, even if you still have a single overall “inventory” of your products.
There are numerous ways to separate your categories. Don’t assume it is only applicable to certain product types. Additionally, inventory can be split according to quick turnover, profitability, etc.
Utilize a Cloud-Based Inventory Planning System
In the present world, when organizations frequently operate globally, manual inventory management is not only obsolete but also nearly impossible. Due to numerous warehouses, worldwide shipping, and global supply chains, inventory management is currently more complicated than it was a few short decades ago.
Modern inventory forecasting software can automate large sections of your inventory management process. Barcode and RFID scanning eliminates human error since machines read codes on things rather than people manually entering numbers.
Beyond that, an inventory planning system helps you avoid costly problems like overstocking or overselling by ensuring you always have the proper inventory quantity. This changes every aspect of your supply chain, including ordering, shipping, and warehousing.
About the Company
With theirinventory forecasting software, Kronoscope, Fountain9 helps organizations implement the best practices in inventory planning. By precisely forecasting stockouts and recommending suitable safety threshold levels, Kronoscope may assist firms in maximizing their working capital. Businesses can reduce the difficulty of managing large inventories by optimally stocking their inventory while considering the anticipated demand for the forthcoming period.
By proactively recognizing SKUs that run the danger of building up at various points along the supply chain, Kronoscope also avoids overstocking. By actively monitoring SKUs piling up (becoming overstocked) at any point in the supply chain, it can identify SKUs that are best for liquidation and helps save wasted time and money spent on procurement and replenishment opportunity costs.