Stock and inventory management: how can you optimize it? At Phocas, we set out to answer this question with one of our in-house subject matter experts. In our recent global webinar, we provided a comprehensive overview about the challenges of inventory management and the benefits of using data to overcome them.
The following is a brief summary of the well-attended event and how Phocas business intelligence (BI) is helping companies achieve growth while maximizing their efficiencies across inventory management.
Inventory management is a never-ending battle. As soon as you negotiate a return of overstock to a vendor, your branch manager is on the phone letting you know that he is desperately short of an item. Maybe at the same time, your finance team or ownership just issued a major initiative to keep overall inventory balances down and to maximize your stock. Managing all of these tasks successfully requires accessible and accurate data, along with a sense of what to do with that information once you have it.
Whether you're managing $30 million dollars in inventory across a dozen branches or a single location with $800,000 in stock, you probably have the same challenges. There are some obvious concerns such as:
- How much stock do I have on hand?
- How much of that is dead stock?
- Which vendors are causing problems that I need to address?
- Is our inventory position creating cash flow problems within the business?
These are important concerns, but the problem is they're very much here-and-now issues. The minute you ask these questions, if the answers turn out to be negative, you are already in trouble. And at that point you're simply reacting to problems instead of preventing them.
Inventory as a function of time
If we say that inventory is a function of time, what does that mean?
Time is an exceptionally useful lens through which to view your inventory. Something is in stock and available for a customer. Advance forward in the future, and now the customer has to wait for that same item. Problems with vendor service aren't typically related to just one shipment; rather they are trends composed of multiple shipments over several weeks or months.
Dead stock is a great example of how important and helpful it can be to look at inventory as a function of time. Almost no product that might be currently considered dead stock ever started out that way. Maybe it was a fast mover and then it was replaced with a rolling substitution by the vendor. Maybe your customers’ preferences changed or a competitive product pushed it out of the market. Or maybe it was a speculative inventory position that never sold as well as hoped and it eventually withered on the vine.
Most inventory managers would agree that if they knew they had to get rid of something, or otherwise it would eventually have to be written off, they would want to know as soon as it became slow moving. With that knowledge, they could have done a sales promotion to move any remaining stock and make the most profit while clearing the inventory.
Inventory managers have a number of core responsibilities that require them to look at many different types of data. The quicker that they know about a potential problem, the better position they will be in and the sooner they can address and resolve the issues before they become emergencies.
Why Phocas BI
Having all your inventory, customer and product data in one place and being able to analyze it quickly and easily is critical for today’s retail distribution and manufacturing businesses. The aggregated data can help you track customer and/or product ordering patterns, which in turn can help you avoid missing opportunities or challenges. You can monitor which products your key customers are buying, or perhaps more importantly, are not buying from you.
If you want out of a product or find you have one sitting on your shelves for longer than you anticipated, you can change your ordering strategies to ensure you avoid overstock or dead stock. You can also quickly create and share customized reports and dashboards to help eliminate reporting bottlenecks and reduce common analysis challenges within your business.
And if everyone in your organization is looking at the same data in a format they understand, everyone will be on the same page, empowered to make smarter, data-driven decisions that ultimately will benefit the bottom line. This is the power of Phocas, which can serve as the single source of truth for all your business data and help you win the inventory management battle.
To watch the webinar and see how Phocas can be used to monitor and optimize inventory levels, as well as overcome inventory management challenges, click here, or on the button below.