Inventory Management Excellence: Anaplan's Role in Optimizing Inventory Levels
By: Emre Mese
Have you optimized the way your business sets its inventory levels? If not, this could become a surprisingly strong source of untapped value.
Inventory management can have a major impact on your overall bottom line — holding the perfect amount of goods in inventory assists your organization from both profitability and overall effectiveness standpoints.
While there are multiple ways to think about and approach inventory management, many of them revolve around the same pillar: having the right technology in place, tuned to meet your needs.
What Are Common Inventory Management Challenges?
A variety of inefficiencies can creep into your organization's inventory management process, making it hard to optimize your profit margins.
These potential issues include:
Inventory costs: Excess inventory that sells slowly doesn't just result in large upfront costs, but also the expense of storing the goods.
Frequent stockouts: Conversely, if inventory levels are too low, the out-of-stock issues will start to disappoint customers.
Inaccurate demand forecasting: An inability to accurately predict demand can lead to either over- or under-stocked warehouses.
Supply chain complexity: Some difficulty in managing stock efficiently comes from the large numbers of locations and suppliers organizations juggle today.
Lack of real-time visibility: Demand and supply can fluctuate significantly in short periods of time, meaning organizations need frequent data updates to respond effectively.
Any combination of these issues can eat into your bottom line, meaning it's a priority to determine which, if any, are at work in your inventory management efforts.
How Do You Identify Inventory Management Problems?
You can engage in numerous kinds of analysis available that can detect challenges within your inventory management efforts. Each method uses a unique combination of variables and metrics to reveal areas worth focusing on.
These tactics include:
Historical data analysis: Trends in past stockouts and inventory overages can reveal patterns that may recur in the future.
Customer feedback collection: Your customers' direct input about their issues with product availability and lead times can deliver useful insights.
Demand variability assessment: Fluctuations by season can be important markers regarding ongoing inventory issues, as can general shifts in demand over time.
Supplier performance evaluation: By comparing your suppliers' lead times and reliability metrics to benchmarks and one another, you can determine your best bets moving forward.
Inventory report review: The turnover rates and other information in inventory reports may point you to more effective approaches.
Once you've conducted a pointed analysis of your inventory management operations, you may find notable challenges and issues. The next question is what tactics you should try when addressing any discovered problems.
What Are Your Options for Resolving Inventory Issues?
Just as there are a few different problems that can arise regarding inventory management, there are multiple possible approaches for putting your organization back on a profitable path.
Some basic tactics to start with include:
Increase safety stock: If your primary problem is frequent stockouts, it can be worth the added cost to carry higher stock levels and be sure you're serving your customers reliably.
Reduce order quantities: In cases when excess inventory is an issue, changing to a more frequent but smaller-quantity order cadence is the most direct solution.
Improve demand forecasting: An investment in demand forecasting tools and the adoption of more advanced techniques can help you stay ahead of shifting demand patterns.
Optimize supplier relationships: There's room for negotiation in many supplier contracts — you can potentially secure lower rates while also boosting communication.
Over the long term, one of the most impactful moves you can make is to implement a new technology platform. Planning software like Anaplan is available to act as a central repository for information and power several advanced forms of analysis.
How Does Anaplan Help with Optimizing Inventory Levels?
Anaplan is a leading software platform, one that comes stocked with numerous inventory management features and functions. By harnessing these capabilities, you can build stronger profit margins.
You can use Anaplan for:
Demand forecasting: Anaplan forms accurate demand forecasts using an advanced analytics engine and historical data.
Inventory optimization: This algorithm calculates perfect inventory levels that will reduce your carrying costs while still meeting demand.
Scenario planning: By comparing scenarios with Anaplan, you can make more effective decisions for the overall success of your business.
Real-time visibility: To improve your inventory management in the moment, you can turn to real-time data views inside the Anaplan interface.
Collaboration: With the collaborative features of Anaplan, you can work together more closely with internal teams, suppliers and partners to set inventory levels.
Data-driven insights: Reporting and analytics functions within Anaplan allow you to clearly interpret insights from your data and make confident decisions.
Rather than cobbling together an inventory management approach through numerous technology portals, Anaplan can become your primary source for oversight and optimization.
What's Anaplan's Overall Role in Comprehensive Inventory Management?
With Anaplan as the centerpiece of your inventory management strategy, you can see numerous benefits in a relatively short amount of time.
These advantages include:
Data integration: You can naturally combine data from multiple sources and systems for a consistent set of facts.
Customized models: Since every organization is unique, you can craft planning models specifically aimed at your needs.
Continuous monitoring: With real-time monitoring of demand and inventory levels, you have a constantly refreshed source of data to act on.
Collaboration: Bringing together stakeholders from various teams and departments enables seamless work, without miscommunications or duplication of work.
A technologically advanced planning solution like Anaplan gives your team the tools necessary for strong ongoing inventory management, building value over time.
A Custom Anaplan Implementation for Your Inventory Needs
While Anaplan is a powerful answer to your inventory management questions, it doesn't work automatically. Some configuration and customization during the implementation process can ensure the technology is perfectly aligned with your needs, giving you a direct path to value and empowering insights.
Allitix can deliver the custom Anaplan implementation your organization needs. Our experts devise solutions that address highly specific planning requirements and provide a quick, decisive return on investment. Contact us to learn more.