Growing businesses need a robust inventory planning system to align the demand and the supply to ensure customer satisfaction. The inventories maintained by businesses are favorably stocked to the optimal level to fulfill orders timely while avoiding overstocking and understocking. It is a complicated process as you need real-time visibility across multiple sales channels and warehouses. Meeting consumer demand across all sales channels is essential for business growth and customer loyalty.

If you do not plan your inventory or manage it, your business is likely to suffer from the consequences. You might lose sales, and there might be inventory overstocking or understocking situations.

Inventory planning is central to every business. The lack of inventory planning might be costly and become an obstacle for your business to grow. Manual inventory planning is hard to achieve in the highly competitive market as every inventory holds multiple SKU units, and all the products have a varying shelf life and supplier lead times. Thus, the need for automated inventory planning through inventory planning systems arises for an efficient, quick, smooth, streamlined, and accurate process.

What is Inventory Planning?

Inventory planning is the process of forecasting the optimal level of inventory and the time when the replenishment orders should be placed. It is done to align the inventory quantities with the production capacity and sales. Businesses can contribute to an effective and smooth supply chain, improve cash flow, and increase revenue.

Why is Inventory Planning Essential for Businesses?

Goods are bought, shipped, and returned across all sales channels, online, mobile applications, and retail stores. Goods are shipped in every possible combination, and consumers have exceedingly high expectations.

Products can be shifted and transferred to different locations during their lifecycle due to returns, shipping modifications due to new technology, and canceled orders. Therefore, accurate inventory planning is necessary and needs automated technology for efficient tracking and generating a pleasing customer experience. Inventory planning tools are essential for obtaining a clear view of the inventory levels, enabling retailers to tackle things better, such as excess inventory, inventory allocation, and other processes related to stock.

Role of Inventory Planning

Inventory planning can offer multiple benefits, which can be beneficial for both the employees and customers.

1. Improved Overall Productivity

The efficiency of employees can significantly improve your organization’s overall performance. Without proper inventory planning, you would be spending employee wages for time-consuming tasks of sifting through files, exchanging spreadsheets with one another, visiting the warehouse when there is any uncertainty related to inventory levels, manually writing reports, and so on. Rather than spending money on these manual tasks, you can perform these tasks with an adequate inventory planning system. You can assist your employees in focusing on more critical tasks that contribute to the company’s growth, and you would be more satisfied with the accessibility and real-time visibility. This way, resources can be utilized in the proper places.

2. Know Where Your Inventory Is Located in Real-Time

Organizations with multiple locations can face problems when employees must communicate over call to find a single piece of inventory or find where it is. Correctly managing the inventory can assist you in preventing any issue related to inventory location that involves problems related to tracking down one product that a customer has ordered.

3. Meet Delivery Dates

Most businesses can develop a bad reputation when they fail to meet the delivery deadlines on time when the products go out of stock from the inventory. Customers would be disappointed in such cases. Certain situations in which the product’s location is unknown to the employees can result in delayed deliveries. With an efficient inventory planning system, inventory can be stocked at every level. With this, productivity can be increased, and the profits can be maximized with automation

4. Get as Many Sales as Possible

With incorrect inventory planning, there remains the scope for lost sales. A lot of issues can arise, such as when employees think that an item is out-of-stock and inform the consumers about the same but later discover that the item was present all the time. Employees may direct a customer to a particular store elsewhere for a specific product only to find out that the store does not have it. With accurate inventory planning, you can experience greater customer satisfaction and customer loyalty.

5. Alter Vendor Order Frequency if Required

The counter issue of understocking has too much inventory, and businesses need to bear an additional burden of storage costs. Many companies conduct huge sales at discounted prices to clear the extra stock, make inventory more manageable, and reduce expenses. It is essential to keep track of the number of items you have in stock and how much to replenish. You can modify the order frequency as required, and it can assist in keeping the inventory in check.

6. Make Re-ordering Convenient

Using Word doc to copy purchase orders might result in errors related to item numbers, specifications, or currency exchanges. Proper inventory planning lets you copy the recent purchase orders and select specific SKU items and specs from a simple menu to prevent errors.

A business requires smooth functioning in all the processes, and you need to ensure there are no glitches in any step. You should ensure that all steps are executed conveniently, which is where the inventory planning system comes into play. You can receive goods, prepare orders and track your inventory easily and professionally.

About the Company

Fountain9 helps businesses maintain their inventory to optimal levels to meet consumer demand. Kronoscope, their AI-powered inventory planning system, can accurately forecast demand for every unit and identify the amount to which the inventory should be stocked to fulfill orders efficiently.