Enterprise software systems make it possible to produce reports and charts using sales, purchasing, financial, supplier, and production datasets. These can be used to compare results against industry-wide key performance indicators over time and also can lead to resolution of problems and furthering of successes. Who doesn’t want this kind of fine-tuning capability of best practices and decision making using these reports? It is likely that your company could benefit from all of this. To learn more about big data and how it can improve inventory management, visit here. Now, let’s look at tools for forecasting and analyzing that are gaining strength and helping companies to create reports and successfully use this data.
Enterprise Software Tools for Analysis
Inventory specialists can take data analysis functionality to a whole new level by integrating inventory optimization tools with existing enterprise resource planning (ERP) systems such as Sage 300 ERP and Sage ERP X3. These enterprise software optimization systems provide graphics that can illustrate the synthesis of data from all departments. These graphics can help analyze, diagnose, and identify seasonal demand shifts, order patterns, likely stock-out dates, lost sales, excess orders, unsellable items, price reduction patterns, and patterns of production downtime among many other capabilities.
The analysis done by an inventory optimization tool can then use this big data to forecast demand with greater accuracy and faster speed. Through this, the system can recommend optimal inventory levels for sales availability. It can take into account possible stock-out and overage risks giving managers the advance warning needed to take care of stock levels when they are becoming too high or too low.
Tools for Management
Managers need to know what is happening with inventory to best respond. Inventory optimization tools make this easy through recommendations given about optimal restocking schedules in addition to automated ordering and re-ordering. In addition to helping find and act on trends, the tools can also help alert managers of exceptions to these trends so they can mitigate them. Through integration with enterprise software such as Sage 300 ERP or Sage ERP X3, the tools communicate across departments and even outside of the organization using actionable intelligence. This can inform decisions about recommended stock levels, replenishment schedules, automated orders, and exception alerts.
Using these tools combined with management and inventory specialists making decisions based on the data and information provided by them, inventory optimization can be achieved. These decisions can help balance the trade-offs between the costs of a stock-out versus the costs of overstocking. Inventory management tools must adjust recommended stocking levels that are dependent upon variable risk tolerance. There is a balance to strike between pushing risk tolerance in the direction of avoiding stock-outs and having more inventory ready versus pushing management to stock as little inventory as possible to avoid storage and waste costs. The ability of an inventory optimization tool to adjust forecasts based on the “what-ifs” is a huge plus to management.
Inventory management is all about making better decisions that result in better balance that depend on the shifting goals that are influenced by the reality of the events going on in the warehouse. Tools that can improve balance provide a large and ongoing return on investment. The goal is to reduce inventory levels by 20 to 50 percent that results in significant savings. Because right-sizing is a complex challenge, cost control and customer satisfaction have become the focus. These are driving the adoption of more sophisticated systems of inventory management. By utilizing new, flexible, and refined tools that provide for dynamic optimization of inventories to maximize customer service and market share while decreasing inventory investment and lowering costs, inventory managers can significantly impact overall competiveness and profitability.
IWI Consulting offers two ERP solutions that have the tools needed for successful inventory management. Learn more about Sage ERP X3. Learn more about Sage 300 ERP. Download our whitepaper “Better Inventory Management: Big Challenges, Big Data, Emerging Solutions” for further information on the tools that enhance inventory management.
Our small and dedicated team specializes in helping small-to-medium size Canadian businesses and non-profits select and adapt Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Human Resource Management (HRMS) and IT services. With IWI’s 15 years in business and 100 plus years of combined experience, IWI has helped hundreds of manufacturing, distribution, and financial service companies gain efficiency, grow, and lower their operating costs.
With the unique combination of industry knowledge and diverse technology expertise, IWI provides cost-effective solutions to help clients gain a competitive edge. As a Sage business partner, servicing the Greater Toronto Area, we support evaluation and implementation of operations and finance systems to optimize technology, ensuring high return on investment with a quick and painless transition to new software.