Inventory optimization is that level of inventory where the cost of inventory is at its minimum, any level above it will lead to wastages in the form of high storing and handling costs and any level below it will lead to high stockout costs for the business. However, finding this optimal level is very difficult as a lot of actual costs and opportunity costs need to be incorporated in the calculation, thus increasing its complexity.
It is the most illiquid current asset for a business. Thus, it is important to invest in an inventory management system that is accurate. Otherwise, a lot of company’s cash can be tied up in it and desperate measures at hand of the management might be needed to overcome losses and reduce the high costs. Similarly, if the company holds too less inventory, the customer satisfaction may suffer adversely when their demand won’t be fulfilled. These unsatisfied customers with unmet needs might shift to rival’s products and it might become impossible to convert them into your customers again. Only if the customer has a bad experience with your competitors or has high loyalty towards your brand, it might give you another chance and come back to the products offerings by your company. The problems, due to lack of inventory optimization activities, are even more grave if the customer whose need was not met was a high value repeat customer and it switches to the competitors.
Our tools use past trends and predict future given the current circumstances to help the managers adopt an approach that is least costly, flexible and also gives some degree of proactiveness in order to fix the situation before it creates some irreversible and irreparable losses to the company.
Our inventory management system not only helps the management calculate its optimum inventory levels with just a few clicks, but also discover other valuable information such as:
These make the task of inventory optimization much easy.