- By Mike Mills
- January 26, 2021
A new automation couple has surfaced: pairing supply chain planning with pricing optimization.
A new automation couple has surfaced: pairing supply chain planning with pricing optimization. Driving this trend is the fact that companies need earlier insights into new market opportunities, including what items consumers want, on what channel, how much they should stock, and how much they will pay for these products.
Nearly two-thirds of all companies report that success based on customer service, inventory turns, and inventory dollars are top measurements enabled by automation technology.
Top wholesalers frequently share that the lack of automation keeps their company goals out of reach. Specifically, a lack of automation means poor management of slow-moving products and seasonal items. Those metrics are secondary to the automation value proposition of improving forecast accuracy.
Revenue improvement must be the main goal and better forecasting and inventory management coupled with price optimization accomplishes that goal.
Automating demand and inventory forecasting
Automation tools allow companies to get a better handle on demand and inventory forecasting to meet business objectives. Even companies that reported meeting inventory goals experienced an average growth in inventory of 3.66%, which by comparison was less than the average growth in sales.
Companies that automate and manage inventory better have fewer products on hand, freeing up cash to optimize other areas of the businesses–or even pay for the next big IT project.
Companies need to evaluate current technology and measurement tools to discover where to improve and invest. When it comes to inventory, nearly half of all companies are able to offer different service levels based on the importance of items or clients. Others use tools that evaluate plans based on demand changes and reconcile sales, purchases, and other financials with budgets. Sadly, more than a quarter of companies fail to use any of these tools.
When it comes to inventory planning software, status quo or legacy systems fail to provide the information required. Still, too often the in-house solutions lack automation to achieve revenue improvement and must continue using outside analysis to better understand the business.
Automation of performance metrics
Companies tracking multiple performance metrics frequently find the current technology failed to provide actionable insights needed to understand the state of the businesses, customer metrics, and the financial and service implications of decision-making. Few have processes in place to combat current business trends, lacking the tools and processes to successfully plan and run the businesses.
Better data and predictions
Companies with better data and predictions control the business most effectively. Helping companies focus on proactive planning, rather than reacting to economic trends is a critical shift. Consumer demand metrics and improved supply chain analytics can also offer insights where additional costs are incurred and managed.
Those looking to improve revenue and better control costs understand that getting a better handle on inventory levels is essential. The use of supply chain planning software, coupled with price optimization, better demand forecasting, and integrated business-planning technology will improve service and revive margins. Investing in data analysis tools and other technologies creates a distinct competitive advantage. COVID created economic uncertainties, chaos, and shifting consumer demand. Only real-time data analytics empower companies with agility, flexibility, and optimization.
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