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How to better forecast inventory needs

Inventory management is a crucial part of any business. It helps with budgeting, keeping customers happy, and much more. In this post, we’ll look at how you can use Proteus MMX to improve your inventory management skills.

Better forecast

Inventory management software can help businesses to forecast their inventory needs better. By tracking sales data and customer demand, companies can better understand how much stock they need to keep on hand. This can help to reduce the amount of time that stockouts occur, and it can also help businesses to avoid overstocking their inventory.

Forecasting can also help businesses to understand better trends in customer demand, which can help plan future production runs. By using forecasting tools, companies can ensure that they always have the right amount of inventory on hand, which in turn can help improve customer satisfaction and bottom-line results.

Increase customer satisfaction

Every business wants to increase customer satisfaction, and there are many ways to do so. One meaningful way is through inventory management. With the right software in place, businesses can ensure that customer orders are fulfilled on time and that products are in the condition customers expect.

In addition, businesses can use inventory management software to monitor pricing trends and choose suppliers that offer the best value for their customers. By taking these steps, companies are able to create a positive customer experience from start to finish and ensure that customers keep coming back for more.

Source: Finances Online, 2022.

Minimize stock-outs

It’s no secret that stockouts can be costly for businesses. Not only do you lose out on revenue from potential sales, but you also risk damaging your reputation if customers can’t find the products they need. In fact, research shows that customer satisfaction levels drop sharply when they encounter a stock out. And while several factors can contribute to stockouts, poor inventory management is often to blame.

Inventory management software can help minimize stockout risk by providing real-time inventory level data. This information can be used to make more informed decisions about reordering and production levels. Additionally, the software can help to improve forecasting and customer service processes. By taking these steps, businesses can help ensure that their shelves are always stocked with the products their customers need.

Reduce carrying costs

Any business that deals in physical goods need to manage its inventory carefully. Not only does this ensure that customers can always find the products they need, but it can also help reduce carrying costs. Storage costs can add up quickly, especially if you have a lot of inventory. By keeping close track of what you have on hand, you can avoid paying for storage space you don’t need.

Shrinkage and obsolescence can also take a toll on your bottom line. Shrinkage refers to losses due to employee theft and damage, while obsolescence is the term for products that are no longer selling.

By reducing these costs, you can free up more resources to invest in other areas of your business.

Optimize reorder points

Re-order points are the minimum inventory level that you need to maintain at all times. The optimal reorder point for a product depends on its lead time, demand rate, and safety stock level.

Lead time refers to how long it takes for your supplier or manufacturer to deliver a new unit after receiving an order from you. A long lead time means it takes longer for another unit of inventory to become available when one is sold; therefore, you should use a smaller safety stock than if there were no lead time involved.

The demand rate refers to how frequently a product sells out over time — it could be daily, monthly, or quarterly depending on the type of business you own and what kind of products you sell. This information, along with your average sales volume, helps determine how much inventory is needed in storage so that customers always have access (i.e., there are never any stockouts).

Safety stocks help minimize the risk associated with fluctuating demand rates by offering protection against unexpected spikes in customer demand.

Source: Jelvix, [s.a.]
Improve inventory management.

To improve inventory management, you need to define what it is. The National Institute of Standards and Technology defines inventory as “all materials, parts, components and finished goods that are being stored or warehoused for use by an organization.”

It’s the practice of controlling an organization’s raw materials, work-in-process goods, and finished goods from manufacturing through delivery to customers.

It includes:

We hope you’ve found this article helpful and that you can use it to improve your inventory management. If you have any questions about how inventory management works or how we might be able to help, feel free to reach out at whatever time is convenient for you! With the suitable systems in place, inventory management is a simple matter of keeping track of what’s going on in your business.

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