Wednesday, October 27, 2021
Useful Resources for Brilliant Manufacturing, Operational & Industrial Intelligence Technology Enthusiasts!

Automation, Control & Plant Intelligence - Articles, Analysis, Reviews, Interviews & Views

Automation Trend: Pairing Supply Chain Planning with Price Optimization

by Mike Mills   |   January 28, 2021

As e-commerce continues to threaten the market with competitive products that are available nearly instantly, shifting consumer trends can make stocking shelves even more challenging. 2021 is the year when 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.





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.

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.

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.

Revenue improvement must be the main goal and better forecasting and inventory management coupled with price optimization accomplishes that goal.

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.

Mike Mills Director, Business Consulting, Blue Ridge. As a subject matter expert with 20+ years of supply chain expertise, Mike adds value to Blue Ridge by providing his expertise throughout the sales process. Mike treats each sale as an opportunity to challenge the status quo and show retailers and distributors how Blue Ridge solutions can have a demonstrable impact to their organization's bottom line. See More Details.

YOU MAY LIKE:
Popular Articles

Manufacturing Insights