Five benefits of insight-driven inventory management
Overview
Insight-driven inventory management or stock-control lets businesses move on from the reactive processes of the past and become forward looking and proactive. This approach can result in substantial reductions in cost of goods sold (COGS) and a marked increase in gross margin return on inventory (GMROI).
1. Improves customer service and loyalty
By offering the right inventory to the right customers at the right time, with an optimised time-phased inventory plan, businesses can find the right balance of consumer demand and inventory costs. MYOB Advanced user Kosmea says “We can accurately control our stock and inventory, manage customer special pricing and segment our customer groups without any drama.”
2. Reduces stock-outs and overstocks
By automating the inventory planning process, businesses can take the guesswork out of purchasing and greatly reduce the problems of under- and over-stocking. Companies who are not taking advantage of inventory forecasting capabilities are missing out a lot of opportunities. MYOB Greentree user EasiYo finds the Greentree IQ Business Intelligence tool especially useful. “We are now able to drill-down to different levels of detail, which in the case of supermarkets sales data, can throw up anomalies which Greentree IQ makes sense of,” says General Manager, David Granger.
"We can accurately control our stock and inventory, manage customer special pricing and segment our customer groups without any drama."
3. Lower inventory costs
Businesses using intelligent data to order and allocate merchandise will quickly reduce their inventory expenses. And with a demand forecasting tool, businesses can generate accurate forecasts that help optimise their inventory levels, and ultimately increase sales and profit. MYOB Exo ditched manual stock control and invoicing and has achieved a better overview as a result. “There is more control from a managerial point of view and also in terms of sales, GPs and trends, plus the ability to manage pricing and having greater stock control has been of huge benefit to us,” says Executive Director, Brett Dallas.
4. Synchronises supply and demand
Integrated inventory planning can give businesses the insights into how fluctuations in supply and demand affect the inventory. Businesses can then focus on improving internal and external communications within their supply chain, and use this as a springboard for success. Furniture Distributor Early Settler uses MYOB Exo to keep tabs on all its purchase orders – a benefit that extends to its cash flow. “Before we were kind of flying blind,” says CFO, Joanne Flood. ‘Now we can keep track of any last-minute amends to purchase orders– and that gives us a better idea of what’s likely to be owing in the next week or two.”
5. Streamlines inventory planning
The inventory planning process can become convoluted if systems and processes are not in place. Extending the inventory planning process helps coordinate all planning and execution functions, and helps bring businesses closer to the consumer. The inventory planning process can also be extended to include transportation planning. MYOB Exo allows homeware retailer One World to easily manage inventory in three separate warehouses. “We can sort and allocate stock to customers according to their annual spend and status,” says Managing Director, Greg Ollerhead. “We can also run so many different reports for stock replenishment based on various factors which we couldn’t do before.”
Conclusion
Insight-driven inventory management is helping businesses reach their crucial financial targets.
By bringing intelligence and visibility into their inventory management they’re delivering substantial cost savings and significant increases in profits.
Integrated inventory planning tools provide the forward-looking data and intelligence that allow businesses to be proactive about the future instead of being reactive based on the past.
