Inventory Optimisation: Our Guide to Transforming your Approach in 2024

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Are you constantly struggling to hold the right inventory? Are stockouts letting sales slip through your fingers, or is excess stock draining your cash flow and driving up storage fees? Have you spent countless hours analysing and managing inventory but still find it hard to gain and maintain the clarity needed to meet soaring demand?

If this sounds familiar, read on as we explore how to stop inventory firefighting and take a more strategic approach. We’ll offer actionable tips for better inventory management today, as well as advice on when to transform your capabilities through new solutions. You’ll see how to enable automation, optimised costs, and visibility to help your business scale sustainably, make the most of your stock, and supercharge productivity.

Stop operational firefighting

There is no way to completely stop firefighting in the supply chain, but transforming your approach can dramatically reduce it in your business. Integrating Excel with your enterprise resource planning (ERP) system is a good first step on your journey towards a more strategic approach. Sharing data allows for more advanced reporting, analysis, and automation. To go even further in Excel, consider harnessing

  • macros to automate complex tasks and processes, like report generation,
  • customised KPI dashboards to provide a real-time view of important metrics,
  • scenario managers to simulate different business conditions and understand their impact,
  • solver to optimise safety stock (your buffer against stockouts) based on changing demand patterns and constraints
  • Power Pivot to create advanced data models for supplier scorecards evaluating their performance.

Depending on Excel for inventory management in today’s challenging and rapidly changing business environment isn’t ideal. Requiring your team to maintain, check, and reconcile a tangle of spreadsheets drains time and money, while increasing the chance of human error and giving you poor visibility for forward planning. Using Excel means you will struggle to adapt to quick changes or disruptions, leading to higher costs from stockouts, overstock, and dead stock.

Here are some clear signals that it’s time to rethink your approach to inventory management.

  • You don’t know the 20% of items that drive 80% of your bottom line.
  • You have higher than necessary levels of safety stock.
  • You’re not monitoring items at risk of stockout and taking preventive measures.
  • You have no product lifecycle process to identify and retire dead stock.
  • You struggle to negotiate effectively with suppliers.
  • You don’t have a demand planning process to inform your buying decisions.
  • You can’t afford to lose the spreadsheet knowledge of certain employees.

Start controlling your inventory strategically

Modern inventory management software brings a slew of new capabilities to help you manage thousands of SKUs, optimise your stock flow, and eliminate waste. These solutions unleash a powerful combination of automation and strategic visibility to help you unlock business value and scale sustainably — making the most of your stock and supercharging productivity with no new hiring.

Drive automation

Modern inventory management software enables you to automate slow and repetitive tasks, freeing up your team’s time to work on strategic activities that add greater value — such as monitoring demand changes, revising stock policies, or tracking inventory turnover to shorten your cash-to-cash cycle. A wide range of automatic forecasts, calculations, and alerts can help you respond more rapidly to changing demand, reduce the risk of human errors, and enhance the accuracy of your data for future decision-making, such as,

  • safety stock planning in line with SKU uncertainty and importance,
  • exception reports that let you rapidly respond to demand and minimise stockouts or dead stock,
  • demand-based replenishment calculations to maintain optimal inventory levels across all locations,
  • supplier purchase plans for more timely and accurate procurement and efficient supplier collaboration.

Optimise costs

Reducing stock levels while keeping shelves full is one of the big benefits of modern inventory management software, but fully optimising supply chain costs goes much further.

Customisable order constraints are essential to drive procurement efficiency, among other things. These constraints allow you to

  • Fill a pallet, truck, or container in a matter of minutes,
  • Meet a supplier’s minimum order value to qualify for a rebate or avoid service fees,
  • Ensure an optimised quantity and mix of products.

You can also evaluate supplier lead times based on their actual past performance, enabling more accurate procurement and negotiation with vendors for better terms.

Enable visibility

Visibility into demand trends, stock levels, and incoming orders is a prerequisite to managing your inventory effectively. However, inventory optimisation relies on having a vast array of information delivered in a user-friendly way — enabling you to make fast data-driven decisions. 

Modern inventory management software brings clear data visualisation capabilities to help you achieve end-to-end supply chain visibility and monitor your inventory turnover in real-time. It can also leverage big data, machine learning, and artificial intelligence for predictive analytics. The ability to forecast future demand based on historical data helps you spot upcoming trends and adapt more quickly to disruption. That means you can make better decisions for tomorrow.

Kick off your transformation

Look for software that’s simple and easy to use to start your journey towards inventory optimisation. You don’t want to make life more complicated. Cutting-edge software also offers the ability to integrate seamlessly with your existing ERP system and can be ready to use in days, enabling your team to make the most of new capabilities straight away.

The most efficient way to transform your inventory management approach is by adopting a software-as-a-service (SaaS) solution. Cloud-based software that requires little to no infrastructure investment dramatically lowers the barrier to entry. You can now benefit from a larger array of inventory management capabilities more quickly and at a lower cost.

Don’t forget the importance of human support. It’s much easier to implement and make the most of your new inventory management software when you can regularly receive expert guidance. A dedicated customer success manager can help your business get started, maintain momentum, and reach specific goals.

We also recommend taking a long-term view. Modern inventory management software isn’t a magic wand. Don’t try to do everything at once. Instead, start small and take incremental steps forward. You might want to narrow your initial focus to optimising your top suppliers, biggest spend, or most important items. Equally, you could begin by focusing on key exceptions like stockouts or overstock — analysing the causes and implementing the right processes to take preventive actions and minimise waste. A focused approach will give your team time to undergo vital training on the new system and ensure you’re using accurate data.

We can help!

Fast to implement, easy-to-use, and highly scalable — our cloud-based inventory management software has everything you need to eliminate waste and grow sustainably. With cutting-edge tools rolled into one risk-free subscription, it’s the missing link in your business success. We also ensure every customer has a dedicated success manager — not only to support them through onboarding, but also to offer long-term guidance on reaching their inventory management goals.

Learn more about how we can help or book a personalised demo.

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