How Should You Approach Inventory Forecasting?

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The greatest challenge faced by businesses with physical goods on hand, is stock and inventory management. While entities may tie up staggering amounts of capital in inventory, most still fail to track their merchandise or still leverage conventional manual approaches. This could lead to setbacks that increase wastage and lower your profits.

Any viable and successful inventory management plan must identify the sweet spot in the inventory volume to have at hand. You do not want to keep dead stock within the premises for years. After all, inventory directly generates profits; hence you must get the most out of it promptly.

Having an accurate stock accounting in place could dramatically impact your business. Inventory management remains an enormous task that is both complicated and time-consuming, yet you cannot do without it.

What Does Inventory Forecasting Entail?

Inventory forecasting involves the use of business data to ascertain the necessary inventory for fulfilling future orders. The process is based on your estimated sales over a given period and relies on factors like historical sales information, previous purchases, current demand planning, and planned production. Some symptoms of poor forecasting include:

  • Inadequate control and visibility over merchandise that could lead to higher part costs
  • Reduced business productivity and unnecessary time wastage as you look for missing items
  • Inability to track the coverage of inventory, hence missing claims
  • Lower asset utilization and downtime when searching for missing items
  • Diminishing client satisfaction thanks to delayed deliveries

Disadvantage of Poor Inventory Forecasting

If your company still uses ineffective inventory anticipation methods, you will likely experience several future problems. You will have a hard time maximizing your returns on investment and damage your brand ultimately.

Below are reasons why you should up your inventory management game through accurate forecasting:

  • Inaccurate Operations Budgeting
  • Overstocking
  • Poor Customer Experience
  • Losing to Competitors
  • Inability to Track Industry Trends
  • More Expenses
  • Loss of Business Credibility

Read the rest of "How Do You Approach Inventory Forecasting?" to learn why you should up your inventory management.

Want to Achieve Better Inventory Forecasting

The current business environment is highly competitive. To stand out and maximize profits, retailers must streamline their operations, control expenses. Most importantly, you need accurate, real-time insights into the business operations if you wish to achieve a satisfactory customer experience.

Savvy entrepreneurs continue to restructure their inventory management to adapt to the dynamic landscape. It is only through forecasting that you can be ready for changes and buffer yourself from future uncertainties.

If you need guidance in mitigating the adverse effects of bad inventory on your company, worry not. You can leverage the StockIQ planning suit for an enhanced supply chain planning to increase visibility and improve your merchandise management through precise inventory forecasting. Contact us today if you have any questions, or if you need to check out our demo.

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