Do you remember life as a Supply Chain Manager before the world got turned upside down by Covid?
It was a simpler, more predictable time. The supply chain was stable and supplier lead times were reliable. Using historical data to manually forecast demand and plan inventory in spreadsheets was foolproof, because the data followed the same patterns and seasonal trends year after year.
Then the pandemic hit and supply chains collapsed, at the very moment demand sky-rocketed. Supply chains still haven’t recovered – and are likely to never be the same again.
In the meantime, markets, shopping habits and the economic outlook have evolved beyond recognition.
Times have changed
Now, Supply Chain Managers everywhere are spending half their time fighting fires, from missing historical data to supplier unpredictability and supply chain disruptions. It’s way more than the trusty Excel sheets they once relied upon can handle.
All the while, SCMs are expected to do their everyday tasks, including balancing inventory levels, forecasting demand to meet customers’ needs and protecting cash flow by avoiding tying up too much cash in stock.
According to Gartner, “60% of chief supply chain officers are expected to make faster, more accurate and consistent decisions”, often in real time.
Doing more with less
The sad reality is, there are more challenges facing Supply Chain Managers now than in 2020 (and any point after). And it could get even worse.
For companies with hundreds or thousands of SKUs, the old way of managing supply which was built upon spreadsheets and manual workflows is simply no longer feasible.
The dawn of this more challenging era requires a new approach; one that leaves outdated spreadsheets in the past and has cutting-edge inventory planning software at its heart.
What is inventory planning software?
Inventory planning software helps businesses properly plan their inventory by using algorithms and statistical models alongside historical sales data to accurately predict future demand. It enables merchants to optimize inventory to meet customer demand, while avoiding overstock (which kills cash flow and leads to waste) and preventing stockouts (which result in lost sales and unhappy customers).
Advanced inventory planning software, like Inventory Planner, helps merchants maximize profit, adapt to market changes and save time by providing reliable buying recommendations based on accurate demand forecasts. It can even automate tedious tasks like generating purchase orders, tracking stock levels, and identifying slow-moving and hot-selling items.
Here are five reasons every Supply Chain Manager should urgently make the switch to using inventory planning software:
1. Order the right items, at the perfect time
Inventory planning software makes it possible to hold the perfect amount of stock – not too much that you risk overstock you can’t sell, and not too little that you risk running out of stock.
Accurate, reliable demand forecasting factors in promotions, seasonality and supplier lead times and is translated into simple, intuitive buying recommendations so you can buy the items your customers actually want to buy and be confident that your orders will arrive on time.
With Inventory Planner, forecasts can be customized at a granular level – you can factor in multiple variants of each item (including size and color) so you can be super specific with your purchasing and avoid having too many variants you might not even sell.
“Inventory Planner has given us real time certainty in a volatile marketplace. It’s super flexible and can be finely tuned so that it factors in seasonality, trends, promotions and market shifts. It means we can glance at the data and instantly say ‘ok, we need to order 100,000 of that item, not 10,000 – otherwise we’re going to run out in two months’.”
– Trevor Martin, Vice President Operations, Snow
2. Eradicate tedious manual tasks
Inventory planning software can stop Supply Chain Managers being tied to spreadsheets doing mind-numbing, time-consuming tasks.
For instance:
- Purchase orders can be created in a matter of clicks directly from buying recommendation reports.
- Inventory can be automatically transferred between warehouses, including partial transfers (the perfect solution when not all items in an order are available from a single location)
- Sales from all channels are automatically updated in one central place
- Slow-moving products are automatically flagged up so they can be liquidated or promoted before they become obsolete
- Forecast demand for new products (and overcome issues with no historical sales data) by creating a demand forecast model for a similar existing product that automatically updates as new data comes in
Eliminating manual tasks can help SCMs save hours every week, which can be re-invested on more critical tasks.
“Not only has Inventory Planner saved us time on manual processes and improved our cross-department communication, but it’s enabled us to allocate costs correctly. Basically we have full visibility of what’s going on, therefore a tighter grasp on our spend. The impact of that has been huge for our bottom line.”
– Kaevon Khoozani, Founder of Bells of Steel.
3. Automate POs
If you have a high ordering frequency or deal with multiple suppliers (each with their own supply requirements, order minimums, and delivery schedules), your purchase order process can quickly become tedious and error-prone.
Inventory Planning software like Inventory Planner can automate and streamline the purchasing process from end to end, saving you time, money, and hassle – and eliminating stockouts and overstock.
Inventory Planner’s purchasing suggestions show you exactly when and what you should be ordering from each of your suppliers based on accurate demand forecasting and supply patterns, such as lead and transit times. It can then turn its recommendations into purchase orders automatically.
You can even pre-set your suppliers’ specific requirements, such as currency, minimum order quantity, minimum order value, weight or volume limits. These supplier specifications are automatically applied to any new POs for the vendor, saving you more time and reducing human error.
“Each PO probably takes us 10 fewer minutes than before, which really adds up. I love that Inventory Planner pops up with intuitive notifications that prevent us making mistakes. For instance, if we try to order an item that’s out of stock in one warehouse, but in stock in another warehouse, a box will pop up to say ‘hey, did you know you already have ‘x’ number of these in ‘x’ location?’. That’s awesome functionality!”
– Steve Velthove, Founder and COO, Inside U.
4. Adapt quickly to supplier issues
The best inventory planning software is designed to help you adapt and respond to supply issues and market shifts without breaking a sweat.
As well as constantly adjusting your forecasts with your most up-to-date sales data (so you always know exactly what to order and when), Inventory Planner has built-in buffers that protect you from sudden changes.
For instance, if lead times suddenly increase you can simply adjust your stock cover days and get replenishment recommendations to cover a certain and specific amount of time. This means rather than risking running out or ordering a set number of units as ‘safety stock’, you can send a customized order for 21 or 30 or 45 days at a time so that the perfect amount of stock is always en route.
Inventory Planner also flags up the ‘actual lead time’ at the catalog/vendor level and in your Good Received Note report for previous POs. This can be compared to what you think the lead time should be – or what your supplier says it should be – so you can make adjustments to ensure orders
In the current climate, supplier issues can crop up at any moment, so it’s all about having the flexibility to respond without losing sales.
“Half our products are made in the US, but half are imported. Inventory Planner lets us input the lead times of our various suppliers so we can time our orders perfectly, and use the precise buying recommendations to make sure we don’t buy too much or too little.”
– Katy Mimari, Founder and CEO, Caden Lane
5. Consolidate data
Supply Chain Managers at medium-sized to large companies often work across dozens of Excel spreadsheets to manage data from different sources. This isn’t just time-consuming; it means there’s no real-time single source of truth, so different team members rely on outdated, inaccurate and inconsistent data.
Inventory planning software combats this by consolidating all data, from all sales channels, into one central hub. Advanced inventory planning software, like Inventory Planner, offers a wide range of seamless integrations so that your data can be securely and speedily transferred.
To keep things simple for multi-channel businesses, only their ERP or retail operating system like Brightpearl needs to be connected for all data to flow effortlessly into Inventory Planner.
“Inventory Planner is a genuinely game-changing tool – especially in the current market. It’s great to be able to go to the CEO with an exact report of our inventory – and it’s not in a random Google sheet that only one person understands. In short, it gives us the power to make informed decisions about inventory.”
– Emily Coolbaugh, Chief of Staff at Driveline Baseball
Book a free demo to hear more about how Inventory Planner can help you manage supply.