Businesses that incorporate inventory planning software add a growth factor to their company. In this article, we’ll explain why businesses should use such software products.
Enterprises that actively use inventory software for inventory planning add a growth factor to their business. Thanks to inventory planning software, businesses can better understand how their demand works, reducing errors and risks as well to improve results.
What is inventory planning software?
It is the technology tool that allows businesses to optimize inventory opitimization.
Inventory control is a key factor for growth, a priority for any company. Both the financial result and customer satisfaction depends on proper control. Moreover, the inventory planning software is the tool that allows for the coordination of all the operations related to the entry, administration and exit of the merchandise required for the business’s activity.
Thanks to the proper inventory planning, the businesses know exactly what sort of SKUs it has in the workhouse, including both raw materials and semi-finished or finished products. Monitoring the flow of goods allows correct planning to ensure a seamless experience for customers and the organizations of operations, as well as for preventing waste and fraud.
Inventory planning software makes it possible to quickly control all product inputs and outputs, which helps provide the necessary visibility to optimize operations.
Businesses that have such type of software can easily optimize their inventory control even in complex scenarios, including sectors such as food, where stocks fluctuate rapidly, seasonality generates significant spikes in demand, or in cases where it is necessary to consolidate the inventory of different channels.
Advantages of using inventory planning software
Nowadays, the market presents several challenges that make it difficult for any company to survive. We are living in an age characterized by great customer demand and enormous competition, whereupon businesses need to seek sustainable competitive advantages.
These advantages comprise efficient management and optimization of each resource. An inventory planning software provides several interesting benefits, such as:
- Offers a good user experience in an omnichannel approach: A cloud-based inventory planning software can easily withstand peaks in activity, responding quickly enough to ensure a great shopping experience.
- Improves the satisfaction of the demand: Such a thing guarantees the maximization of sales income and simultaneously helps avoids any instances when customers search for another supplier.
- Expand inventory locations: streamline stock control even if locations are diversified while providing real-time information to everyone involved in the chain.
- Provides the ability to offer various services such as store pickup or shipping from the exact point where a specific product is located.
- Helps avoid errors that can lead to user dissatisfaction and/or additional costs to solve problems, such as requirements to make urgent shipments.
- Ensures the optimization of unsold stocks to optimize the return on investment.
- Improves planning based on forecast demand and delivery times, adjusting it on the fly when necessary thanks to real-time information and exact knowledge of stock locations.
Inventory management system in the enterprise
Even now, in lots of businesses, inventory management is performed by the purchasing department, working closely with other departments of the network. The replenishment system is built in such a way that the demand of consumers is completely covered, and all the necessary reserve is present. Simultaneously, the stock levels were minimal. To perform this, the procurement specialist must accurately calculate the required volume, delivery leverage, and understands the dynamics and demand of products as well as the specifics of working with suppliers.
When such complex work is performed manually by managers, human factors problems can arise in the supply chain. This is why businesses are actively choosing to automate this process. To perform this, IT technologies are being incorporated that make business processes much more efficient. The modern inventory management system at the enterprise comprises of:
- inventory management method;
- automated system;
- optimized processes;
- trained staff.
Inventory management of a business directly affects its profitability. In order to achieve the financial and operational efficiency of the network, it is necessary that stock provides the necessary level of sales and does not lead to surpluses on the other.
How does inefficient inventory management of a business manifest?
Because of the errors in the inventory management, businesses can face the following problems:
- loss in sales because of lack of inventory;
- increase in turnover;
- surpluses in which the company’s funds are frozen;
- additional storage costs;
- write-offs due to deterioration, aging of stocks.
If the inventory management system is not centralized, and orders are created at each outlet separately, this can add to complications. The replenishment of goods is not always transparent, and a lot of things depend on the expertise of a specialist.
How to choose the right inventory planning software
Several small businesses still use manual methods to plan their inventory. Such a thing suggests that a lot of small businesses are still vulnerable to errors. This is the reason, having inventory planning software helps avoid chaos and human errors.
However, choosing the right inventory planning software is not an easy task. You need to consider the business nature, the business’s size, as well as the specific challenges and requirements.
As per the most common criteria, inventory planning software should:
- Consider seasonality;
- Analyze data in real-time;
- Take into consideration the excess and lack of stock;
- Make adjustments for the product’s location in its life cycle.
An inventory planning software must provide a balance between ensuring the availability of the right product for the customer and maintaining a minimum inventory in the warehouse. This is why, at Fountain9, we provide AI-based demand and inventory planning solutions to help businesses achieve their goals and grow their business faster.