Growing businesses are moving to automated inventory planning solutions which helps them stay agile and maintain optimal inventory levels. Maintaining right inventory helps businesses to stay ahead of the competition and meet consumer demand efficiently without having to face stockouts. Enterprises are rapidly transforming their approach from maintaining an inventory manually to automating the process with AI-based software to make things easier.
Inventory Planning Is Significant for Businesses
Proper inventory planning plays a vital role in successful day to day business operations. Retailers who engage in inventory planning solutions that involve spreadsheets might have faced numerous challenges during the pandemic. Usually, a monthly review that consumes a lot of time and effort is manageable.
These days, changes have become more frequent, and there is more volatility than in the past. Supply and demand patterns saw a rapid change during the pandemic, showing the frailty of the old order. Since the pandemic, it has become very significant to get insights into the inventory in real-time. It can give businesses an idea of what raw materials are coming in, how much work has been completed, and track the finished products.
You can get real-time visibility of the inventory across the supply chain, and it assists enterprises in enhancing efficiency and income and upgrading customer service. Contemporary inventory planning software has brought improvement in the following areas.
- Sales – On-time delivery can be ensured, and the order fulfillment rate is higher.
- Warehousing – Reducing expenses through practical usage of space and lesser damage.
- Manufacturing – Plant efficiency can be increased by allowing constant manufacturing operations.
- Management – Improved and well-informed decision-making.
Essentials Of Good Inventory Planning
Just-in-Case vs. Just-in-Time Inventory
Capital is utilized more effectively when the just-in-time inventory is implemented. It focuses on precise demand forecasting and the reliability of suppliers. Any mistakes or errors that happened during the pandemic have contributed to significant problems with out-of-stock items, incomplete or late supplier deliveries, over-stocking, the unexpected arrival of new orders, customer complaints, and the pile-up of orders.
The real purpose of maintaining inventory was to cover for unexpected situations and uncertainties from the suppliers and fluctuating consumer demand. Just-in-case inventory was thought of as expensive previously, but it has paid dividends to businesses that have used it to keep running factories with proper stock, hold prices steady, and fulfill customer orders. Inventory planning solutions that encourage redundancy have proved to be more productive than super-efficient strategies.
To adjust to new realities, retailers need to modify their supply chain practices and inventory planning, connect with suppliers and confirm that they have insight into operations regardless of where they are.
Supply Chain Operations Reference Model
The supply chain operations reference model for managing the supply chain involves six complicated processes that a company should run to satisfy the foremost aim of fulfilling consumer demand. Some say that it is outdated in the modern world while it allows businesses to detect the processes, KPIs, and data that should be monitored at every stage. Thus, businesses should be able to adapt to new situations and modify their inventory planning techniques. The steps of supply-chain operations reference can guide businesses through the process.
Plan
It is the stage in which the current inventory planning solutions and supply chain process are analyzed, and different abilities and opportunities are surveyed. New digital disciplines are adopted, and tools are integrated to collaborate, sense, optimize and respond. In relation to the internal value chain, it may need funding technologies that offer real-time tracking of products. Supplier interaction can be digitized through a portal for tracking and updating the status of orders and schedules of delivery electronically. Thus the processes are made more efficient, and it also minimizes mistakes and enhances order precision.
Source
If you need to alter the sourcing strategy, such as alternative or near sourcing, you need to look at improved methods of monitoring suppliers and their performance. To ensure that inventory reaches the right time and in the right quantity, the organization should consider blanket orders. For improving the costing and management of imported goods, a platform may be needed to keep track of shipments, oversee the estimated arrival schedules, and provide a reliable estimate of expenses. A system is integrated that performs quality checks before materials are acquired into the warehouse to ensure quality.
Make
The task of inventory planning solutions in production is to make availability of materials as smooth as possible. It requires knowing what items are used in production, their exact location in the warehouse, and the time for replenishment orders. It may also include recording and tracing item and batch numbers to ensure quality.
Deliver
When a product has been manufactured, it should be noted as a new inventory product and placed in a finished goods inventory. It may be at another location, and thus, tracking products in transit is necessary. The process is handed over to digital technology for getting real-time insights. Knowing the position of goods in the finished warehouse is significant for finding and packing efficiently.
Return
The return process can be made better in a lot of industries. When a product is returned, it must go to the returned goods warehouse for examination to identify the next step, whether to repair or return it to the supplier. Extreme care should be taken so that the returned products are not mistakenly shipped to another customer.
Enable
This step is an integral part of the inventory planning solution. Internal controls should be strengthened around the inventory to safeguard, replenish and maintain it. Processes can also be automated to improve accuracy and absolute inventory tracking. The best way of handling these is to integrate an inventory planning software that unifies the operations throughout the business. It also provides precise master data so that a real-time view of products and their locations can help in proper decision-making.
Data-Driven Approach to Inventory Planning
A data-driven inventory planning approach allows business owners to make well-informed decisions. Investments in technologies for inventory planning are bearing fruit, and businesses are profiting from them.
Fountain9 assists businesses with efficient inventory planning solutions. They have an AI-based inventory planning software that can help you have real-time insight into the inventory and warehouses, track raw materials and finished products and monitor the movement of goods across supply chains at the granular most levels.
