Manage inventory organization with enVista’s Inventory Management Consulting.

Inventory optimization helps organizations determine how much stock needs to be ordered to meet demand at any given time. It allows an organization to track inventory from when it is purchased, to when and where it is sold. Good inventory optimization will respond to trends, allowing an organization to get ahead of any industry shortages and ensure there is enough stock to fulfill all customer orders.

Since excess inventory can tie up an organization’s available cash, it can cost an organization to keep too much inventory in stock. Therefore, a good inventory management solution also makes sure that an organization doesn’t have too much unused inventory. Since organizations never want too much deadstock (unsold stock), inventory turnover is used as a measure to determine an organization’s inventory optimization success. enVista’s inventory optimization consultants can help ensure that your organization has enough stock to fulfill your order quantities, while also working on reducing unsold inventory to maximize company profits.

Demand forecasting  

Demand forecasting uses historical data to understand the likely future demand for a product. It helps companies make informed decisions about how much stock to store, and it gives an idea of future revenue over a given period.  

Inventory replenishment 

Inventory replenishment involves moving certain products out of inventory storage and onto picking shelves. This clears out space for more inventory to be received from a manufacturer. This process helps make sure there is plenty of inventory ready to be picked and packed to meet order demand. This helps prevent delayed deliveries and backorders, increasing customer satisfaction. 

Inventory Storage 

Any company that sells physical goods must invest in optimizing inventory storage. Optimized inventory storage helps companies save money, fosters customer satisfaction and creates space for business expansion. 

Inventory levels 

Keeping the right inventory levels can save a lot of unnecessary costs. Too little inventory can lead to dissatisfied customers, leading to loss of business and missed sales opportunities. Too much inventory can lead to high storage costs. Because of this, one of the biggest goals of an inventory optimization project is to figure out the ideal inventory levels for a company.  

enVista’s inventory optimization consulting allows your organization to:

• Reduce overall inventory holding costs with inventory reduction
• Improve service levels to the end customer
• Improve inventory turns with inventory optimization systems
• Reduce capital risks with improved inventory accuracy
• Reduce distribution center storage requirements

With an optimized inventory plan, you will see optimized inventory levels to match the needs of your business. This allows you to leverage inventory performance increases and changing product flows, which can reduce stock levels to address issues of overcrowded warehouses, poor cash flow, and obsolete inventory. You will be able to utilize our in-house modeling tools that determine optimal inventory positioning down to the SKU-level based on push-and-pull boundaries, supply and demand variability, velocity class (ABC) and other factors.

Inventory optimization consulting will help you determine optimal product position in the network in order to maintain service level but reduce overall holding cost of inventory. This allows you to understand the cost of inventory held relative to the sales of the product.

Creating an inventory plan for your company is crucial to saving money, improving customer service levels and driving growth. Here are a few common inventory optimization techniques. 

• Use demand forecasting 

Accurate demand forecasting requires a company to have access to historical order data. This data shows the bigger picture of past sales trends and helps a company anticipate high and low order times. Demand and inventory forecasting also allow companies to decide when they need to hire seasonal staff, increase warehouse storage space, run a sale, etc. For a small company, demand forecasting may be simple, but as companies grow, it can become more and more difficult to keep track of data, so most large companies employ demand forecasting tools. 

Choose the right reorder points 

Successful companies need to know when to order new stock. Order it too early, and you will encounter storage issues. Order it too late, and you will run into inventory issues. A company’s reorder point should make sure that too much cash is not tied up in inventory at any given time. Lead times (the time it takes inventory get to your warehouse, from your manufacturer etc.) should also be considered.  

• Keep the right amount of safety stock 

Safety stock (also referred to as “buffer inventory”) is the excess stock a company keeps on hand to mitigate unexpected hiccups. For example, safety stock can keep a company on track even if there is an issue with a supplier or a sudden demand surge for a product. Things like maximum daily usage, average daily usage, and maximum lead time can be used to calculate the amount of safety stock a company needs. 

• Conduct an inventory audit 

Accurate and regular inventory audits go a long way in helping companies keep track of inventory. A company’s holding costs (storage, warehouse staff wages, depreciation costs etc.) should be watched to avoid any problematic discrepancies and to make sure the company is holding the right amount of inventory.  

• Distribute inventory across your warehouses 

Having all your inventory in one place can make things easier to manage, but it is not always the most effective method of inventory storage. You want to have your inventory close to where the demand is. For this reason, it is best for large companies to distribute inventory across multiple fulfillment centers, so that orders can be delivered quickly, and shipping costs can be minimized. 

• Keep track of SKUs 

Most major companies sync their SKU’s to some type of inventory optimization software. This helps them update, track, and manage products, even across wide distribution networks. Keeping track of your inventory in real time helps your company avoid running out of inventory or overselling.