1. Categorize your inventory
This is similar to ABC analysis practice where management categorizes its inventory according to its value and speed to turnover. Sales number and profitability margins are some of the ways stocks are valued. Inventory optimization software, such as Eazy Stock, can help inventory managers track an item‘s demand and lifecycle across 9 different demand patterns, from new to growing decline, to ensure replenishment practices and customers demand are never out of step with each other.
2. Automate Demand Forecasting
The company‘s performance is often dependent on external conditions such as seasonal demand, market trends, economic conditions and other business trends that can cause unpredictable demand variability. Automated demand forecasting can be used to take the guesswork out of how much inventory should be carried for a given period. Automation dynamically calculates an inventory item‘s based demand according to historical sales data to ensure minimum order quantities are optimal.
3. Replenishment Automation
A centralized inventory management system coupled with inventory optimization software will enable a company to better track inventory levels and prepare for unexpected events. They can also avoid over stocking and under stocking situations as demand patterns can automatically override the replenishment parameters based on predetermined stocking policies and service
4. Continuous Process Improvement
Unless companies continuously monitor and analyze operational challenges, they may keep getting the same results, which include high operational costs, poor customer service levels and inefficient operations.
5. Invest into Inventory Optimization Technology
Most wholesalers and distributors rely on antiquated technology platforms such as ERP and WMS to drive their planning, forecasting and replenishment processes. Unfortunately, these types of systems were not designed to optimize inventory levels. Companies looking to gain a step on the competition need to evaluate add-on systems that can support more lean operations and more efficient operations to save costs and increase service levels