Using Analytics To Manage Inventory
Inventory management is indeed a challenge for manufacturers and retailers. Any supply management problem that may arise has consequences. For example, excess inventory can result in decreased product sales and lost profits, whereas inventory depletion can result in order cancellations, dissatisfied customers, and lost sales.
The use of performance inventory analysis plays a key role in inventory management and process optimization, helping manufacturers and retailers better define their warehouse goals and determine whether upstream or downstream issues need to be addressed.
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Let's look at the main areas where maximum utility analysis can be applied: overstock and inventory.
While excess stock can harm profits, there is often more at stake than reduced profits. For example, food manufacturers and retailers are very sensitive to product volatility, which makes effective inventory management all the more important to ensure that only one safe product is delivered to customers.
Optimizing inventory based on insights from the indicators above can help companies strike a better balance between supply and demand fluctuations – often with immediate results.
This is especially true for distributors who have significant working capital on their inventory. For them, even a small improvement in inventory planning can have a huge impact on the cash register. So in this inventory analytics is required.