Inventory Planning Roles and Responsibilities – It is essential to analyze demand patterns and forecast demand. Inventory planners work with purchasing and contract managers, supply chain financial analysts, supplier managers, quality and production control, and stakeholders. <\/li><\/ul>\n\n\n\nDespite the benefits of inventory planning, many organizations do not indulge in the practice and ultimately suffer losses due to out-of-stock items and low-profit margins. <\/p>\n\n\n\n
Goals of Inventory Planning<\/strong><\/p>\n\n\n\nThe primary motive of companies is to satisfy customer demand. Customers may shift to your competitors if they do not get the right product at the right time. This, in turn, affects the business turnover as acquiring new customers is more challenging than retaining existing customers. <\/p>\n\n\n\n
- Cost Control – Inventory planning aims to minimize the expenses of storing products. That is reducing the holding costs such as purchase costs, taxes, insurance, labor, stock decay, etc. <\/li>
- Forecasting – It is the process of predicting future sales and, therefore, future inventory needs to maintain an optimum stock level. <\/li>
- Sufficient Storage – Efficient storage facilities help you to maximize profits. By storing high-demand items so that the lead time is reduced, you can achieve a productive layout, maximizing profits. <\/li><\/ul>\n\n\n\n
Factors to Consider While Planning Inventory<\/strong><\/p>\n\n\n\nWhile you are monitoring your inventory processes, you need to take into consideration a number of aspects. External as well as internal factors influence inventory management in various ways and you should consider some of these factors. <\/p>\n\n\n\n
- Product Volume and Type<\/strong> – Historical data can be used to understand the demand for a particular product. Moreover, inventory planning systems<\/strong> should show the historical trend. You can also use Google Analytics to understand demand patterns. Depending on this research, you can maintain stock for meeting high demand.<\/li><\/ul>\n\n\n\n
The kinds of products should also be considered while managing inventory. Some products may have an expiry date and have a shorter shelf life. Inventory should be stocked accordingly.<\/p>\n\n\n\n
- Safety Stock<\/strong> – Safety stock is the additional quantity of an item that is stored in the warehouse for preventing scenarios of out-of-stock products. It becomes the savior against demand fluctuations. <\/li>
- Fill Rate<\/strong> – It is the amount of customer orders a business can fulfill without running out of stock. It is used to understand the efficiency of your business to fulfill orders. You should aim for a high fill rate and stock your inventory accordingly. <\/li>
- External Factors Influencing Inventory<\/strong> – Several external factors may also affect inventory management. Economic downturns may be one such factor and you should assess the economy to avoid cases of understocking or overstocking. Local competition and real estate markets are other factors affecting inventory. Other factors that affect inventory are promotions and marketing, the income of the consumers, seasonal demands, competitor activities, trends and customer preferences. <\/li>
- Efficient Warehouse and Lead Time<\/strong> – The warehouse should be well-organized for picking items and fulfilling orders in time. It should be large to accommodate stock at times of sales offered by suppliers. The warehouse should be strategically located to minimize the shipping costs and allow you to receive goods before your competitors. You can also hire third-party logistics companies to perform this function.Lead time<\/strong> is the time from the moment an item is ordered to the time it takes for the product to arrive. Lead time varies with different products and it also depends on the manufacturing processes involved. Any changes in this factor can lead to changes in inventory management. <\/li>
- Supplier Scoring<\/strong> – Improve the relationship between supplier and inventory management system. Inventory management hugely depends on suppliers and reliable suppliers should be deployed by successful businesses. An irresponsible supplier can negatively impact the inventory and businesses should ensure that they contact a reliable supplier for avoiding stock outs or delayed deliveries.<\/li>
- Automated Processes<\/strong> – An inventory planning software for retail<\/strong> helps in reducing mistakes in repetitive tasks and thus employees can focus on improving planning and processes. It is essential to manage the inventory efficiently and supervise the processes and track every individual item to make sure they are stocked in the right amounts. <\/li>
- Financial Factors<\/strong> – Borrowing money for stocking inventory can affect inventory management significantly and finances may be wavering due to the varying interest rates. The expense behind tax for stocking inventory can also influence inventory management. Other factors related to finance are the costs related to warehouse operations and transportation costs which might require you to change your inventory management processes.<\/li><\/ul>\n\n\n\n
Inventory planning can proliferate the retail business’s growth if done accurately, and it can bring huge profits and reduce business expenses. So, you have to maintain an optimum inventory level with safety stock to meet consumer demand efficiently and avoid losses. A robust inventory planning system <\/strong>can provide helpful insights into historical sales data and analyze it to forecast demand from time to time. <\/p>\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"
For e-commerce brands and retailers, inventory planning can be complicated as they operate across multiple online sales channels along with various physical stores. Handling a large database of customers and expanding the business along with sudden market shifts might be challenging.Thus, forming a detailed inventory plan is essential for reducing out of stock and inventory […]<\/p>\n","protected":false},"author":6,"featured_media":8167,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"footnotes":""},"categories":[830],"tags":[2911,2912,2913],"_links":{"self":[{"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/posts\/8163"}],"collection":[{"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/comments?post=8163"}],"version-history":[{"count":1,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/posts\/8163\/revisions"}],"predecessor-version":[{"id":8168,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/posts\/8163\/revisions\/8168"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/media\/8167"}],"wp:attachment":[{"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/media?parent=8163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/categories?post=8163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zaratechs.com\/wp-json\/wp\/v2\/tags?post=8163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}