All organisations use inventories in one way or the other, but not every one requires sophisticated applications. In some industries, such as real estate, legal services or childcare, monitoring supplies might be easy. However, industries where supply chain forms a major operation feature - like manufacturing, warehousing, and retail industries have multiple inventory management issues like labour-intensive counting, stock-outs, and inventory management shortages owing to inaccurate demand planning and forecasting.
Inventory management is a broad concept which involves controlling and preferably optimising stock quantities. This occurs through the whole cycle of such products from purchase to the eventual disposal, making sure that the right product is in the right place at the right time.
80% of supply chain leaders cite inventory management as a top concern in 2024 due to increased demand variability and supply chain disruptions.
Only 30% of retailers have real-time visibility into their stock levels, leading to overstocking and missed sales opportunities.
About 60% of inventory in warehouses sits idle for more than six months, tying up valuable resources and space.
In this article, key issues and the technology solutions guiding and helping to improve inventory management workflows.
The need for AI demand forecasting software is anticipated to witness a rise due to changing supply chain models of product manufacturers and rapidly growing consumer demand, especially in the transport & logistics, e-commerce and retail sectors.
The need for manufacturers to streamline inventory management processes and curb costs globally is one of the key trends triggering the market growth. Spiralling demand for the software may be attributed to its ability to optimise supply chain and improve customer satisfaction.
This growth is primarily driven by the increasing need for businesses to optimise supply chains, reduce operational costs, and improve efficiency across industries. Companies are investing in advanced technologies, such as cloud-based solutions, AI, and IoT, to enhance inventory tracking and forecasting capabilities. These systems enable better decision-making, ensuring that businesses can adapt to fluctuating demand planning and forecasting to avoid both overstocking and stockouts.
Why imprecise inventory planning leads to missed opportunities
Deciding when to order raw materials or anticipate fluctuating consumer demand remains a major challenge due to inaccurate inventory estimates. These inaccuracies can lead to stock-outs or overstocking, disrupting operations and increasing costs.
Why fragmented data networks hinders operational efficiency
The challenge worsens when multiple warehouses, sales points, and production units are involved. Without effective data sharing, planning becomes fragmented, leading to misaligned operations and inefficiencies across the supply chain. This lack of transparency impedes real-time decision-making and prevents businesses from having a clear, unified view of their processes.
Why inaccurate inventory counts cause stock discrepancies
Whether it’s deciding when to order raw materials for production or trying to predict fluctuating consumer demand in retail, achieving accurate inventory estimates remains a persistent challenge. Poor estimation can lead to stock-outs, halting operations and disappointing customers, or overstocking, tying up capital and increasing storage costs.
Why Mistimed Purchases Impact Profitability
Inaccurate replenishment lead times disrupt the supply chain by causing stockouts which can lead to lost sales, increased costs, and poor customer satisfaction. These delays or misalignments affect production schedules and inventory planning, creating inefficiencies across operations. To mitigate this, businesses need accurate data, reliable forecasting, and strong supplier coordination.
Demand Forecasting for Seasonal and Flat Trends:
Demand forecasting in supply chain guarantees that you order only as many inventories as required in the storage space. This is quite important especially for perishable goods so that you do not find yourself with spoilt stocks or out of stock. Planning tools use past sales and customer records that are receptive to patterns created by seasonal changes or changes in consumers’ behaviour. It is advisable to search for flexible forecasts at the product level, particularly during intermittent periods such as festive seasons.
Proactive Stock Alerts:
One disadvantage of cycle counts is that they don’t provide real time inventory accuracy in a way that can avoid stockouts. This way your software will send notifications based on the threshold set for low stock. Selecting systems that rely on forecasting to arrive at the correct inventory quantities and economic order quantity, lead time, and reorder points must be selected with the ability to perform automatic ordering.
Open-to-Buy (OTB) Functionality:
OTB functionality determines the amount of funds necessary to produce the required demand, yet maintain cash. As a multi-dimensional tool, this raises the problem of managing inventories in relation to the revenue to be generated from stocks on the shelf.
SKU Slot Availability:
To specific warehouses that have their slotting systems, using software that integrates with sales data will ensure the warehouse gets the right arrangement of stocked items that customers always purchase together, leading to time-saving in picking and efficient space.
Automated Inventory Reporting:
Inventory reporting should be more of real time, with systems collecting data then preparing a format report that is ready to use. This efficiency is important since the majority of the SMBs companies are still using manual systems to conduct their stock.
Seamless Integrations:
Select software that instil in your current calendar-based applications such as other online selling platforms, warehouse management, customer accounting, shipment and delivery, client relationship management, and point of sale solutions among others. Though ideal for immediate use, go for features that support API compatibility since they are compatible with most devices. It also represents the fundamental capacity to deal with large fluctuations in the amount of inventory and sales.
At Merchmix we assist businesses of all sizes in attaining greater transparency and control over their inventory management. As we have seen, there are a number of ways to achieve this, with manual, Excel spreadsheet-based systems being arguably the most popular. While this works in principle, these systems do have serious drawbacks and limitations, most importantly the lack of access to the real-time data you need to make successful business decisions.
Without this responsive data access – with the ability to quickly download reports and access a central dashboard as required – you will always face the risk of overstocking, or not having the stock you need to respond to a market requirement.
Merchmix is a supply chain demand planning software that further reduces the limitations and manual edits using a spreadsheet-based system.
Faster order turnover and increased sales
Lower levels of write-off, obsolescence and overstocking
Reduced inventory costs
More efficient, smaller warehouse footprint
Connect with the team today and book a demo to revolutionise your inventory management and planning in 2025!
Publish Date : 2025-01-16
Onboard Merchmix and Let AI Handle the Heavy Lifting in Planning.
