Your inventory is a balance sheet asset, so stock should be kept to the lowest levels while simultaneously guarding against out-of-stocks. SYSPRO can help you minimise cash tied up in 'dead' stock and keep your inventory processes fast, fluid and efficient.
SYSPRO's Inventory Optimisation supports the four key steps to perfect inventory management:
Analyze stock codes according to their impact on profitability, revenue generation, and historical supply and demand behavior. This identifies critical items that require detailed forecasting. An analysis of the behavior of items over time determines seasonal fluctuations.
The forecasting process enables an organisation to forecast customer demand by item; the main driver of sound inventory planning. This process should be fine-tuned over time, using actual past data to ensure future forecast accuracy.
Determining stock policies
Stock policies are modeled to determine the best balance between customer service and inventory investment. A key outcome of the policy is safety stock – this is required to ride-out unpredictable fluctuations in demand caused by events such as strikes or natural disasters.
Replenish according to plan
Software solutions are available to ensure the timely replenishment of stock according to the forecasting policy. It is important however, to remember that it is not just about inventory levels.
The benefits of Inventory Optimization
- Modeling of different what-if policy scenarios for the best mix of service and inventory investment
- Improved stock turns and service levels
- Reduction of waste in the supply chain
- Risk policies use Poisson or normal distribution for target service levels
- Consolidation of warehouses at regional or territory level for logistical and supply chain purposes
- Highlighting of problems, such as over- or under-stocking, and stock-outs
- Improved ability to manage demand
- Clear and objective measures of the balance between supply and demand
- Optimization at the stock-keeping-unit (SKU) level with aggregation up to higher levels
- Selection sets in common with inventory forecasting allowing for consistency in processing