Inventory planning involves using forecasting techniques to estimate the inventory required to meet consumer demand.[1][2][3] The process uses data from customer demand patterns, market trends, supply patterns, and historical sales to generate a demand plan that predicts product needs over a specified period.
Using the demand plan, supply chain professionals collaborate with suppliers to ensure timely deliveries, manage warehouse stock levels, and set production schedules.
Advantages
editProper inventory planning provides several advantages.[2] It helps manage cash flow, which is crucial for businesses, especially those with limited capital.[2] Managing inventory costs and sourcing efficient inventory contributes to financial stability.[2] Aligning inventory with market demand improves operational efficiency, as does consistent inventory turnover.[2] However, managing obsolete stock is vital to avoid potential financial issues.[2]
Structured inventory planning can also mitigate the risks of inventory misuse by employees.[2] In situations lacking adequate oversight, potential risks such as theft or unauthorized use can negatively affect financial results.[2]
Software
editThe use of software can further enhance inventory planning.[3] Some notable software includes Inventory Planner by Sage,[4] SAP IBP,[5] Syrup Tech,[6] and Toolio.[7] Such software also automates various inventory tasks, promoting precise and efficient planning with reduced manual intervention.[2]
References
edit- ^ Sharma, Sanjay (2022). Inventory Planning with Forecasting Expenditure. CRC Press. ISBN 9781000545067.
- ^ a b c d e f g h i "What Are the Benefits of Inventory Planning & Control?". Houston Chronicle.
- ^ a b Young, Liz (June 16, 2023). "Retailers Are Trying to Fix Their Supply-Chain Forecasts" – via Wall Street Journal.
- ^ Arthur, Andrew (September 16, 2021). "Bristol tech firm acquires French-founded company in major deal". Business Live.
- ^ Lei, Wang; Chandna, Sanchit; Kusters, Jeroen; Bhandari, Atul (2019). Inventory Planning and Optimization with SAP IBP. Rheinwerk Publishing.
- ^ Hall, Christine (July 13, 2022). "Syrup Tech developing some sweet inventory-planning software". TechCrunch.
- ^ Hall, Christine (October 21, 2021). "Toolio bags $8M in new funding to keep your retail shop fully stocked with the right products". TechCrunch.