The Right Inventory Planning Solution for Better Processes & Outcomes
As part of an inventory planning solution, inventory policy management helps an organization set standard guidelines and rules supporting more accurate planning and faster decision making. It’s imperative in an overall planning process to know how much inventory to purchase and where it needs to be placed. Policy settings such as replenishment cycle, review period, safety stock, service level, back-order ratio and dynamic policies can be applied. A flexible approach to inventory modeling allows for appropriate inventory targets to be set at any level of the product or location hierarchy.
Service-level targeting is important in an inventory planning solution because it creates a balance between achieving higher service levels and optimizing inventory investment. Through inventory-level sensitivity analysis you can decide which level is appropriate for your business based on the inventory requirements needed to obtain your targets.
inventory planning solutionInventory-level projections help users to manage inventory by visually illustrating the expected changes in inventory over a future time period. At any point, the projected inventory level represents the balance of incoming supply and outgoing orders based on your inventory targets and forecast requirements. The inventory-level projections should highlight exceptions such as shortfalls, excess stock and potential stock-outs so that proactive action can be taken to minimize the impact on the business.
Another feature of an inventory planning solution, ABC classification, allows you to know which are the most important, revenue-producing products. By understanding which products deliver the highest margins and perform the best, you can allocate inventory dollars to the most important products. Reversely, you can minimize in inventory investment in the less important products.