Implementing an inventory optimisation solution is about understanding what inventory you need to ensure you meet customer demand and decrease working capital so that you deliver on time, every time.
Getting into the nitty-gritty of your inventory may seem like a herculean task, but implementing an inventory optimisation solution actually saves you time and money, while delivering a seamless customer experience.
Inventory optimisation software allows you to keep track of where your stock is in your entire network and how much stock you have on hand at any given time. This is hugely beneficial to your business from a stocking, sales and customer service point of view - allowing you to give your customers what they want, when they want it.
However, the main benefit of optimising your inventory is the reduction in working capital. By saving money on excess stock, you’ll have far more money available to inject into other key areas of your business.
Inventory Optimisation (IO) software will help you ensure that you only have as much stock as you need to on your shelves. It helps you balance how much inventory you need on-hand to meet the targets you’ve set for your business - giving you access to accurate data to guide your decision making.
Logility writes, “Without proper balance, excess inventory accumulates throughout the supply chain and traps vital working capital. Often companies attempt to manage inventory through a ‘rules of thumb’ philosophy or their Enterprise Resource Planning (ERP) system.
This approach leaves companies vulnerable and unable to account for demand uncertainty, supply volatility and the inter-dependencies between nodes and tiers of the network. Inventory Optimisation (IO) can have a huge financial impact by minimising inventory and freeing up working capital while guaranteeing the right stock is on hand, when and where it is needed.
Nucleus Research found that companies applying IO tools generally reduce inventory holdings in the range of 10 to 30 percent.”
What does inventory optimisation look like? Take a look at how the Stanley Black & Decker, using Logility’s Voyager Inventory Optimization™ reduced finished goods inventory by 27%.
An inventory optimisation system gives you benefits across the board. It not only helps streamline your processes, but it generates valuable data to aid your decision making. If you’re inventory optimisation system is a good fit for your business, it should save you considerable amounts of money by right-sizing your inventory, reducing excess stock on hand and freeing up capital for you to invest in other important areas of your business.
Achieve measurable improvements by using the techniques highlighted in this handbook. Download the Inventory Optimisation Handbook now and build these capabilities in your company.
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