Business Policy Blog

Pursuing Best practices in demand planning, forecasting and inventory optimization

Business policy provides strategic guidelines that help organizations manage operations and achieve long-term goals. It is especially important in inventory management and demand planning, where it ensures that supply chain operations are aligned with the company’s strategic objectives.

Business policies utilize predictive analytics and regression analysis to manage inventory effectively, avoiding excesses and shortages while optimizing costs and responsiveness. The implementation of these policies involves advanced statistical methods and technologies to enhance accuracy, reduce errors, and adapt to market changes, thereby maintaining operational efficiency and competitiveness.

Check out industry best practices below on how to optimize your inventory to cut costs, meet demand, and streamline your supply chain.

Make AI-Driven Inventory Optimization an Ally for Your Organization

Make AI-Driven Inventory Optimization an Ally for Your Organization

In this blog, we will explore how organizations can achieve exceptional efficiency and accuracy with AI-driven inventory optimization. Traditional inventory management methods often fall short due to their reactive nature and reliance on manual processes. Maintaining optimal inventory levels is fundamental for meeting customer demand while minimizing costs. The introduction of AI-driven inventory optimization can significantly reduce the burden of manual processes, providing relief to supply chain managers from tedious tasks.

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Daily Demand Scenarios

Daily Demand Scenarios

In this Videoblog, we will explain how time series forecasting has emerged as a pivotal tool, particularly at the daily level, which Smart Software has been pioneering since its inception over forty years ago. The evolution of business practices from annual to more refined temporal increments like monthly and now daily data analysis illustrates a significant shift in operational strategies.

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Constructive Play with Digital Twins

Constructive Play with Digital Twins

Those of you who track hot topics will be familiar with the term “digital twin.” Those who have been too busy with work may want to read on and catch up. While there are several definitions of digital twin, here’s one that works well: A digital twin is a dynamic virtual copy of a physical asset, process, system, or environment that looks like and behaves identically to its real-world counterpart. A digital twin ingests data and replicates processes so you can predict possible performance outcomes and issues that the real-world product might undergo.

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Direct to the Brain of the Boss – Inventory Analytics and Reporting

Direct to the Brain of the Boss – Inventory Analytics and Reporting

In this blog, the spotlight is cast on the software that creates reports for management, the silent hero that translates the beauty of furious calculations into actionable reports. Watch as the calculations, intricately guided by planners utilizing our software, seamlessly converge into Smart Operational Analytics (SOA) reports, dividing five key areas: inventory analysis, inventory performance, inventory trending, supplier performance, and demand anomalies.

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How Are We Doing? KPI’s and KPP’s

How Are We Doing? KPI’s and KPP’s

Dealing with the day-to-day of inventory management can keep you busy. But you know you have to get your head up now and then to see where you’re heading. For that, your inventory software should show you metrics – and not just one, but a full set of metrics or KPI’s – Key Performance Indicators.

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Recent Posts

  • Managing Spare Parts Inventory: Best PracticesManaging Spare Parts Inventory: Best Practices
    In this blog, we’ll explore several effective strategies for managing spare parts inventory, emphasizing the importance of optimizing stock levels, maintaining service levels, and using smart tools to aid in decision-making. Managing spare parts inventory is a critical component for businesses that depend on equipment uptime and service reliability. Unlike regular inventory items, spare parts often have unpredictable demand patterns, making them more challenging to manage effectively. An efficient spare parts inventory management system helps prevent stockouts that can lead to operational downtime and costly delays while also avoiding overstocking that unnecessarily ties up capital and increases holding costs. […]
  • 5 Ways to Improve Supply Chain Decision Speed5 Ways to Improve Supply Chain Decision Speed
    The promise of a digital supply chain has transformed how businesses operate. At its core, it can make rapid, data-driven decisions while ensuring quality and efficiency throughout operations. However, it's not just about having access to more data. Organizations need the right tools and platforms to turn that data into actionable insights. This is where decision-making becomes critical, especially in a landscape where new digital supply chain solutions and AI-driven platforms can support you in streamlining many processes within the decision matrix. […]
  • Two employees checking inventory in temporary storage in a distribution warehouse.12 Causes of Overstocking and Practical Solutions
    Managing inventory effectively is critical for maintaining a healthy balance sheet and ensuring that resources are optimally allocated. Here is an in-depth exploration of the main causes of overstocking, their implications, and possible solutions. […]
  • FAQ Mastering Smart IP&O for Better Inventory ManagementFAQ: Mastering Smart IP&O for Better Inventory Management.
    Effective supply chain and inventory management are essential for achieving operational efficiency and customer satisfaction. This blog provides clear and concise answers to some basic and other common questions from our Smart IP&O customers, offering practical insights to overcome typical challenges and enhance your inventory management practices. Focusing on these key areas, we help you transform complex inventory issues into strategic, manageable actions that reduce costs and improve overall performance with Smart IP&O. […]
  • 7 Key Demand Planning Trends Shaping the Future7 Key Demand Planning Trends Shaping the Future
    Demand planning goes beyond simply forecasting product needs; it's about ensuring your business meets customer demands with precision, efficiency, and cost-effectiveness. Latest demand planning technology addresses key challenges like forecast accuracy, inventory management, and market responsiveness. In this blog, we will introduce critical demand planning trends, including data-driven insights, probabilistic forecasting, consensus planning, predictive analytics, scenario modeling, real-time visibility, and multilevel forecasting. These trends will help you stay ahead of the curve, optimize your supply chain, reduce costs, and enhance customer satisfaction, positioning your business for long-term success. […]

    Inventory Optimization for Manufacturers, Distributors, and MRO

    • Managing Spare Parts Inventory: Best PracticesManaging Spare Parts Inventory: Best Practices
      In this blog, we’ll explore several effective strategies for managing spare parts inventory, emphasizing the importance of optimizing stock levels, maintaining service levels, and using smart tools to aid in decision-making. Managing spare parts inventory is a critical component for businesses that depend on equipment uptime and service reliability. Unlike regular inventory items, spare parts often have unpredictable demand patterns, making them more challenging to manage effectively. An efficient spare parts inventory management system helps prevent stockouts that can lead to operational downtime and costly delays while also avoiding overstocking that unnecessarily ties up capital and increases holding costs. […]
    • Innovating the OEM Aftermarket with AI-Driven Inventory Optimization XLInnovating the OEM Aftermarket with AI-Driven Inventory Optimization
      The aftermarket sector provides OEMs with a decisive advantage by offering a steady revenue stream and fostering customer loyalty through the reliable and timely delivery of service parts. However, managing inventory and forecasting demand in the aftermarket is fraught with challenges, including unpredictable demand patterns, vast product ranges, and the necessity for quick turnarounds. Traditional methods often fall short due to the complexity and variability of demand in the aftermarket. The latest technologies can analyze large datasets to predict future demand more accurately and optimize inventory levels, leading to better service and lower costs. […]
    • Future-Proofing Utilities. Advanced Analytics for Supply Chain OptimizationFuture-Proofing Utilities: Advanced Analytics for Supply Chain Optimization
      Utilities in the electrical, natural gas, urban water, and telecommunications fields are all asset-intensive and reliant on physical infrastructure that must be properly maintained, updated, and upgraded over time. Maximizing asset uptime and the reliability of physical infrastructure demands effective inventory management, spare parts forecasting, and supplier management. A utility that executes these processes effectively will outperform its peers, provide better returns for its investors and higher service levels for its customers, while reducing its environmental impact. […]
    • Centering Act Spare Parts Timing Pricing and ReliabilityCentering Act: Spare Parts Timing, Pricing, and Reliability
      In this article, we'll walk you through the process of crafting a spare parts inventory plan that prioritizes availability metrics such as service levels and fill rates while ensuring cost efficiency. We'll focus on an approach to inventory planning called Service Level-Driven Inventory Optimization. Next, we'll discuss how to determine what parts you should include in your inventory and those that might not be necessary. Lastly, we'll explore ways to enhance your service-level-driven inventory plan consistently. […]

    Problem

    What is my inventory position today, on any item?  Where are we stocking out and how often? What are my delivery times?  Why did we ship late?  Do we have too much inventory in one location, not enough in another?  What are my real supplier lead times?   These are obvious, daily questions, and the answers can reveal underlying root causes that when resolved will improve supply chain performance.  But these answers are elusive, often because data is locked up in your ERP and only accessible via limited reporting views or spreadsheets.  Creating these reports manually using Excel requires data imports, reformatting, and distribution to key stakeholders, wasting countless hours of valuable planning time. This means that getting updated information, when you need it, is not always possible. Not having access to these answers means that problems reveal themselves only after it is too late, and opportunities for improving the inventory planning process are overlooked, further contributing to poor performance.

    Solution

    Smart Operational Analytics (SOA™) is a native web reporting solution available on Smart’s Inventory Planning and Optimization Platform, Smart IP&O.  It provides a fast, easily understood, current perspective on the state of your inventory, its performance against critical metrics, actual supplier lead times, opportunities to rebalance stocks across facilities, and helps you uncover root causes of operational inefficiencies.  SOA automatically refreshes as often as you’d like providing all stakeholders immediate, up-to-date reporting on your operations and performance.  You’ll have constant visibility of inventory levels, orders, shipments, and supplier performance to ensure you’ll always be in tune with the state of your operations and resolve issues before they become problems. Enhance visibility. Improve responsiveness. Increase your bottom line.

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      Smart Operational Analytics

      Inventory Analytics

      Quantify inventory value
      Inventory segmentation
      Inventory classification
      Trend metrics over time

      Operational Performance

      Measure service level performance
      Measure fill rate performance
      Calculate turns, holding & ordering costs
      Trend metrics over time

      Supplier Insights

      Measure supplier performance
      Compare supplier lead times
      Rank suppliers across available metrics
      Trend metrics over time

      Who is Operational Analytics for?

      Smart Operational Analytics is for executives, planners, and operations professionals who seek to:

      • Measure inventory costs and performance in real time.
      • Assess and compare Supplier performance.
      • Identify root causes of stockouts, excess inventory, and late deliveries.
      • share KPI’s such as service levels, turns, costs, and more across the organization.
      What questions can Operational Analytics answer?
      • What does my inventory look like? By value, count, classification?
      • Is my inventory trending up, down, or the same?
      • How much of my inventory is overstocked, understocked, or acceptable?
      • Can inventory be transferred from overstocked locations to under stocked locations?
      • Can existing supplier orders be cancelled or deferred?
      • What are my current turns, service levels, and fill rates and how do they trend over time?
      • How many out of stock events occurred this week, this month, this quarter?
      • How are my suppliers performing, how do they compare?
      • What is my supplier lead time and how has it changed over time?
      Inventory and supplier reporting for your enterprise

      Smart Operational Analytics empowers you to:

      • Benchmark service performance and inventory costs.
      • Benchmark supplier performance.
      • Assess and Classify Inventory by class, stage, and more.
      • Share metrics with the organization.

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