Managing and keeping track of your inventory becomes more challenging when your business grows by moving into new sales channels and entering different markets. The increasing sales results in higher order rates that ultimately amp up the complexity of fulfilling new orders driven from various sales channels. This is where manually handling your inventory management becomes a mammoth task. To deal with complex supply chain and inventory-related difficulties, your business needs inventory planning software to thrive in this competitive market.
Manually handling inventory brings a bundle of challenges that impact not only the business but also business efficiency. From having to process different orders across each sales channel to keeping daily track of inventory and then updating the information on each platform, everything takes a significant amount of time and effort. And the time taken to accommodate this information will result in a lack of visibility in real-time stock levels. Business leaders will miss the opportunity to reorder the stock at the right time. Stockouts will make you lose out on potential customers and cause colossal business losses.
In this blog, we will examine how to efficiently use inventory planning and forecasting so that your business can function smoothly and not put a dent in your bottom line.
What is Inventory Forecasting?
Inventory forecasting is predicting how much inventory you need to order and at what time. Accurate inventory planning can help you plan for future product demands, save more, and boost revenue. An optimum inventory forecasting software considers all factors that affect future demand like seasonality, historical data, current and future trends, stock levels, market volatility, promotions, etc. and constantly adjusts to any changes.
For systematic inventory planning, a forecast that drills down to granular levels like estimating demand for a product-SKU level or warehouse level and at a particular channel is essential.
Inventory planning tools are a crucial part of managing inventory. It will enable you to set more realistic goals for your business and manage your budget more efficiently.
Top Benefits of Inventory Forecasting
1. Forecasting Can Help Maintain Inventory
Inventory Forecasting software helps you control how much inventory you will need for a particular period of time in the future. You can identify the right amount of stock to keep in hand without tying up lot of money into inventory holding costs. You will also understand how much space you need and not waste extra money.
2. Your Business Will Need Less Manual Efforts
Using the right inventory management system can automate tasks requiring manual labor. Forecasting sales, cost, and revenue in one place can help you more accurately predict future sales. The dashboard can also help you reduce excessive efforts for your business.
3. Your Product Cycle Will be More Effective
Forecasting also helps increase supply chain efficiency. Scheduling with the warehouse, production, and shipping will be more on time. And you can quickly resolve any spike in demand to ensure enough stock is available.
4. You Can Reduce Stockouts
A stockout happens when you run out of inventory. When this situation occurs, your sales can go down, and your customers could face some discomfort with your business. With the help of inventory planning tools, you can fulfill orders accurately, so customers receive the product on time. Your customers will be more satisfied and won’t turn to your competitors. Forecasting improves the customer experience.
5. You Can Reduce Waste
With thoughtful inventory planning, you’ll know which product is performing best and which is not. This lets you plan accordingly and free up the space for bestselling products.
What is Inventory Planning Software and How Can it Help Your Business?
Inventory forecasting software enables businesses to automate the process of inventory planning. It uses technologically backed algorithms to take most of the data entry and guesswork out of inventory forecasting.
With the help of planning software, you can have just the right amount of inventory at the right location, in the right time, you can reduce the cost of maintaining excessive product, optimize inventory allocation routes, and make sure that there is always the right amount of stock to meet customer demand.
Improving Inventory Planning with Technology
Inventory planning can be enhanced, improved, and aided with the right technology. An upgraded inventory management system can offer users adaptable inventory planning control over various parts of any product’s lifecycle, from production in the factory to warehouse storage and transitioning.
Though some businesses might be perfectly fine using Excel sheets to handle their inventory, they can easily get overwhelmed by increasing order volumes and product SKUs when their business starts to expand.
Inventory planning is the backbone of supply chain management. That’s why it’s vital to choose leading and experienced inventory planning software. With the rise of technology, many businesses have started to develop their own IMS.