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Proper Inventory Planning for your Business Needs

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Article by Richard Warburton

Inventory Planning is highly essential for any organization. The planning must be done in such a way so that the company’s plans and the demands of the market are in sync. With the rapid alteration in the demand, the need for inventory planning has arisen to a great extent. Proper inventory planning will thwart any major problems, including depleting sales profit margin and cash flow that are likely to occur in future.

During inventory planning it is essential to take into consideration the Demand Management, Production Planning, Sales and Operations Planning, Material Requirements Planning and Inventory Reduction.

What are the common inventory issues that a business could face? Debtors’ leniency, shrinkage, cash flow planning, slow moving inventories and loss are some of the inventory issues that can be set right by proper inventory planning.

If you are set on making your business boom with your inventory planning, then concentrate on the following areas: Proper inventory valuation, classifying fast moving and slow moving things in your inventory list, and marking out obsolete inventory is strongly recommended. Further, it is best to code your inventories electronically. You may also create a spread sheet and keep a track of your outgoing and incoming inventory. Insuring for inventory losses that could occur due to rain, fire, etc., is the best strategy.

Thinking of a software solution that will lessen your inventory planning burden? Well, there are umpteen numbers of choices available. Run a web search and you are sure to zero in on the best inventory planning software that will suit your needs. Make it a point to choose an inventory planning software from a company that is trustworthy and has a vast client base.

What are the techniques used in inventory planning? Some of the most popular techniques are JIT, MRP, DRP, SCM, Risk Management and EOQ. Generally, each of these techniques are used for inventory planning alone and in some cases a combination of them are used for better results.

A proper investigation is necessary to find out the root cause for inventory losses. In case the problem continues, it is not advisable to zero in on a particular factor alone because there could be a combination of factors. Tackling the inventory issues as soon as it rears its ugly head is important.

Find the best inventory solutions that will help in forecasting, optimizing the stocking levels and the inventory, and refill the stock based on your business requirements.

Richard Warburton writes on business and information technology. Demand Solutions has been providing software for the full spectrum of supply chain management – inventory planning, sales & operations planning (S&OP), demand planning and forecasting, collaboration, inventory optimization and replenishment, advanced planning & scheduling and retail planning.










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Steelwedge Sales and Operations Planning Test Drive

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Implementing Successful Enterprise Resource Planning Systems

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Article by Daniel Collins

When it first became economic to use computers for business, companies began searching for appropriate applications. While repetitive calculations, like the ones used for payroll, were no problem to the computer, when attempting to calculate the amount of materials a company would have to buy, problems arose. Material Requirements Planning (MRP) systems, as they were known before ERP systems, had two main faults. Firstly, nobody could work out how to keep the planning systems stable, with every MRP run producing widely different results, due to the fluctuations in demand and supply. Additionally, the MRP systems were driving inventory up, rather than reducing it, due to every fluctuation upwards increasing supply orders which could not be easily reduced.ERP was sold as the solution to these problems. Essentially, ERP systems are the same as MRP systems but with some extra features, which vary from system to system. Typically, human resource management and salaries and document control will be included. The mechanics for implementing a successful ERP are not difficult yet many businesses stumble during the set up of such systems due to not establishing a common agenda throughout the business and ensuring everyone involved has their own needs and objectives met. Once this is established the tools and techniques needed to accomplish this is relatively easy.Key to the successful implementation of the system is a sales and operations plan. This is the process by which financial business plans are converted into operational plans for running the business. If the sales and operations plan is to be a common plan, it must have a common language. The common language is nearly always the things a company produces and the customer buys. After all, having a sales department talking about the value of orders received is useless when the factory want to know what to produce and when. The sales and operations plan is the starting point for master production scheduling, a way to get everyone working in synchronisation before improving control of the business using ERP as the tool.Once set up, the main role of the Master Production Schedule is demand management. This is a commercial process and so must be taught to commercial people. Demand management utilised properly gives a higher level of customer service and more stable manufacturing with lower inventory, meeting everyone’s business objectives. An enterprise resource planning system is the only tool you need to achieve a change in business performance but it is not a solution in its own right. Factors such as sales and marketing departments providing a regularly updated forecast of the product they need to meet the market needs and when they need it and when Operations recognise it’s in everyone’s best interests to follow the plan are key to the success of your business and ERP system.

Daniel Collins writes on a number of topics on behalf of a digital marketing agency and a variety of clients. As such, this article is to be considered a professional piece with business interests in mind.










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