In wholesale distribution, the success or failure of your business has a one-to-one relationship with the accuracy of your inventory calculations. Faulty lead-time figures, for example, can throw out the whole supply chain. Costs get out of hand. Customers get out of spirits.
That is why Inventory Control uses several different methods for analyzing your stock. It gives you several different ways of looking at things and makes it more likely you will spot problems early. It is a sophisticated way manage inventory enabling you to fine tune your business. Inventory Control shows you:
- Volume value and movability
- Excess stock warnings
- A map of seasonal or other trends
- Inventory turnover
- Lead-time analysis and adjustment
- A measure of the service you are getting from suppliers and you are giving customers
- An analysis of the variation in demand
- Alerts of unexpected deviations from your plans
- Automatic purchase suggestions.
Increasing inventory turnover will reduce stock, but the way set up automatic replenishment of stock can have a profound effect on your costs. Inventory Control helps you make the best decision for your business:
- It will give you forecasts of demand based on historical information, from your customers’ forecasts of their needs, or from demand-driven manufacturing systems
- It helps you set EOQ (economic order quantities) and calculates the best times to order new inventory. It deploys calculation rules according to the product type you specify. But you can adapt the rules to your own needs and simulate their effect before you put them into practice
- It steers you towards appropriate safety stock levels for different products based on their lead-times and variations in demand.
Replenishment suggestions
Inventory Control helps you hone the management of your stock by suggesting when orders should be placed. These can be set to automatically trigger purchases or you can review each one. Usually the suggestions will be based on a periodic analysis of demand. But critical or high-value products can be controlled tightly by continuously reviewing their stock levels.
You may want to share the burden with your suppliers. Because IBS Inventory Control uses the industry-standard EDI (electronic data interchange) format, suppliers can monitor your inventory levels and the demand forecasts you provide, and automatically replenish stock. See Supplier Delivery Schedules for more details of how IBS software helps you run SMI (supplier managed inventory).
Simulation
You only realize the amazing power of Inventory Control when you start to simulate the impact of changes. You can try out different service levels, lead-times and costs and see the effect on turnover and the capital you have tied up in your inventory.
You can also change order quantities and see how that works in comparison with real data on sales and stock. You can also use it to see if cost savings from supplier discounts make a real difference to cost price and individual product margins.