Three Inventory Decisions To Reconsider

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Maintaining the right inventory, at the right time, in the right quantities is not an easy task.  A number of variables can change rapidly which can lead to knee-jerk decisions that may not be in the best interest of inventory management.  Here are three common decisions that need re-thinking:

  1. We must always have the inventory that customers want at all times: If you are searching through paper order forms or databases trying to figure out what inventory to purchase, then you’ll likely end up making decisions on old and inaccurate data. You may not be able to clearly identify customer demands or product trends with manual processes. In addition, although you stock many items, there may be items you can order on the fly or ship directly from suppliers.
  2. We must replenish inventory when we run out: Although you may not intentionally wait until bins are empty, discrepancies in spreadsheets and physical inventory counts can quickly lead to stock-outs. In addition, just because customers ordered a product before, doesn’t mean they’ll order it again and you may not want to restock items that are becoming obsolete.
  3. Buy extra when the price is low: Buying extra quantities to save money could easily become wasteful with expired items or products that just won’t sell. You don’t want inventory that sits on the shelves and takes up valuable space that could be used for more popular items.

These common inventory management mistakes can be avoided by using adding a powerful forecasting and replenishment solution to your enterprise resource planning (ERP) solution, such as Demand Manager® by RockySoft.  This solution adds time-saving automation and clarity to the procurement process.  You can maintain real-time inventory counts and store less inventory by getting closer to an appropriate safety stock quantity.  Storing only what is necessary will save money from overbuying and investing in inventory that could expire or become obsolete.  The auto-detect features in Demand Manager will notify your team when stock is close to the minimum level you set.  You can also deploy more precise forecasts by product, customer, or region.  You can use historical data, customer specifications, and product trends to create forecast scenarios that meet your strategic goals, budgets, and customer demand.

Managing inventory with manual processes can be challenging and lead to mistakes.  Contact RockySoft for more information about making better inventory decisions with more powerful inventory management solutions.

By Jeffrey Porter with RockySoft, Microsoft Dynamics software provider for demand planning

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