How do you maintain an up-to-date inventory count? Understanding what’s on your warehouse shelves is always necessary but is especially important when supply chains and consumer demands are changing rapidly. Staying on top of stock levels and knowing how to predict future demand will separate you from the competition.
As the industry continues to evolve, maintaining business agility and gaining the strategic insights to better align inventory levels with business goals is crucial.
What is Inventory Forecasting
Inventory forecasting requires a complex mix of statistical and mathematical data analysis, experience within the industry and customer insights. Also known as demand planning, inventory forecasting is the practice of using past data, trends and known upcoming events to predict needed inventory levels for a future period. It ensures businesses aren’t spending too little or too much on inventory.
Maintaining Accurate Inventory Forecasting
Managing inventory on hand can be a daunting task. The process and results impact every aspect of your business, so it’s not surprising that a long list of challenges can accompany the effort. Let’s take a look at a few common ones, and how accurate inventory management and forecasting can help minimize or avoid them altogether.
Optimizing Warehouse Space
Inventory management is a tricky and complex process. However, “the combination of inventory management and forecasting helps the business optimize its use of warehouse space, and the quantity of each product, based on accurate demand data.”
Reduce Obsolete Inventory
Successful forecasting saves money by reducing excess” or “dead” inventory that isn’t sold from a lack of demand. An accurate inventory management system that generates reliable forecasts can help to reduce obsolete inventory and minimize write-offs.
Minimize Carrying Costs
“By tying up excessive resources on products sitting in warehouses, companies can miss out on unknown opportunity costs.” To reduce carrying costs, the visibility of accurate inventory management solution enables supply chain staff to be able to better forecast demand.
Avoiding Ordering Excess Inventory
Through an implemented inventory management system, automation is the safest step towards minimizing write-downs and excess inventory to be able to plan supply levels more efficiently.
Benefits of NetSuite for Inventory Management
In the past, inventory management software was only really beneficial to large companies. However, NetSuite’s inventory management tools helps organizations of all sizes improve business processes allowing the ability to run on one cloud platform.
With inventory planning tools built to pull historical data and sales history, NetSuite is optimized for manufacturing and distribution sales trends. This includes modules for full supply chain management from start to finish.
Having one system to manage your entire operation comes with benefits, including:
- Inventory Control
- Inventory Management
- Inventory Tracking
- Inventory Barcoding
- Inventory Optimization
- Inventory Alerts
Many businesses don’t understand the strategic advantage of inventory planning. In order to eliminate the problem of never running out of inventory, excess stock on hand is kept. It’s a self-induced problem that snowballs into other inefficient processes.
On the other hand, many organizations practice lean inventory and run the risk of leaving money on the table. Balance is key when it comes to managing inventory and forecasting effectively, which is why successful business leaders take action with inventory management software.
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