Tag: Inventory Optimization Solutions

Retail Inventory Management

Retail Inventory Management: 5 Methods to Tackle Surplus Stocks

Managing inventory turns out to be a complicated process for many retailers, given the rising competition and complexity of the environment in which they operate. Factors such as these have made inventory management a top priority for product-oriented businesses like retail. Retail inventory management is categorized as a complicated process because on the one hand, you need to have an array of products and enough stock to satisfy your customers, and at the same time, overstocking could lead to surplus inventory that you’re going to have to liquidate.

Inventory management which was as easy as maintaining a hand-written document has now evolved to be a key aspect of supply chain management. To meet the increasing demand in a highly competitive environment, retailers are now adopting an omnichannel approach, to showcase different types of products and offer more fulfillment options to their customers. Given the rapid pace of development within the retail industry, adopting a more sophisticated approach to retail inventory management isn’t just crucial, but imperative. Today, there are tons of different retail inventory management methods that can help retailers to avoid stocking up on surplus inventory. If you’re someone who is just starting, inventory management will undoubtedly be one of the major challenges that you are bound to face. In this article, we’ve curated a list of top retail inventory management techniques to help you get started

Enhance inventory control and avoid overstock scenarios using advanced inventory management analytics solutions. Request a FREE proposal for personalized insights.

Retail Inventory Management Methods That Can Help Manage Surplus Stocks

#1 First-in, first-out (FIFO)

One of the easier methods to control inventory stocks and implement them in your business is – FIFO. This approach is more straightforward and doesn’t require retailers to manipulate stocks, as long as they purchase the right amount to meet the demandAdopting such an approach helps retailers to drive profits by avoiding out-of-stocks and improving inventory control.

#2 Last-in, first-out (LIFO)

The last in first out retail inventory method approach is based on the principle that the stocks sold should carry the cost of the most recent purchase, though, the real-world physical flow might vary. Also, this method assumes that the most recent cost (the approximate cost to replace the consumed units) is most significant in matching cost with revenue in the income determination procedure.

retail inventory management

To learn more about the inventory management techniques and strategies to improve inventory control, contact our supply chain analytics experts.

#3 Just-in-time (JIT)

Just-in-time or JIT is another retail inventory management method that has gained industry-wide acceptance in the retail community over the past few decades. This approach revolves around a needs-based approach to effectively manage and control inventory stocks.

# 4 Gross margin return on inventory (GMROI)

Gross margin return on inventory is a percentage that helps you determine the margin for every dollar spent on products. GMROI can also be used to assess store-level, department-level, and product-level profitability and identify key areas in your business where you can make changes to improve returns.

#5 Open-to-buy (OTB) inventory planning

Open-to-buy is a retail inventory management method that helps you gauge the stocks you can acquire to meet demand without any risk. In other words, it helps determine the amount of inventory required to meet customer demands while maintaining positive cash flow. Open to buy plans also account for other inventory planning issues around sales and promotions, market demand, and current and planned stock levels.

Request a free demo to understand the benefits of inventory optimization solutions in retail.

big data analytics in retail

Quantzig’s Inventory Optimization Solutions Helped a Major Retail Company to Improve Supply Chain Efficiency by 18%

A leading retail chain based out of Norway was facing several challenges due to a myriad of inventory management problems such as demand fluctuations, reverse logistics, overstocks, managing SKU’s, bullwhip effect, and stock-outs. To tackle such predicaments, they approached Quantzig to leverage its inventory optimization solutions to maintain an accurate count of their inventory and improve overall supply chain efficiency.

The Business Challenge

For retail companies, inventory is the largest incessant investment today, so getting the most out of this investment is important for success. Yet inventory optimization in an omnichannel world presents a whole new set of predicaments for retail players. Though retail businesses are adopting innovative approaches to enhance their service levels, they fail to devise effective strategies to make it profitable.

Quantzig’s supply chain solutions follow the critical path method for managing and overcoming supply chain disruptions which can otherwise lead to huge financial losses. Request a FREE proposal to gain better insights into our portfolio of services.

Better inventory management plays a crucial role in improving customer satisfaction levels which, in turn, helps retail companies in the long run. Inventory optimization is the easiest proven path to significant cost savings and increased revenue for retail companies. At Quantzig, we offer inventory optimization solutions that help businesses to strike the perfect balance between inventory investments and service levels. Also, it empowers them to build an optimal inventory system that is more connected, intelligent, and scalable.

To combat the growing threat posed by online retailing, a leading retail company in Norway was looking at a holistic approach to inventory management to manage their warehouse at multiple locations, deal with overstocks and out-of-stock scenarios, and overcome inventory risks.

Our inventory optimization experts help leading companies identify and measure the risks in the inventory. Get in touch with them right away to know how.

Inventory Optimization

Solutions Offered and Value Delivered

Quantzig’s inventory optimization experts adopted a comprehensive approach to understanding the pain points in the client’s supply chain network. They leveraged advanced algorithms to optimize stock levels and provide better control over the inventory. Furthermore, this helped the client to save money, improve their customer service levels, and boost customer satisfaction significantly.

Our inventory optimization solutions also empowered the client to:

  • Reduce inventory levels by 25%
  • Improve cash flow and return on invested capital
  • Enhance production cycles, visibility, and agility across all points of supply chain
  • Boost supply chain efficiency by 18%

Quantzig’s supply chain solutions empower companies with real-time data visualization dashboards to make accurate decisions and gain better control over the inventory system. Request a FREE demo below to know more.

inventory optimization

A German CPG Firm Reduced Inventory Costs and Freed-up Millions in Working Capital Using Inventory Optimization

The client is a consumer-packaged goods manufacturer based out of Germany. With multiple warehouses spread across Central Europe, the client faced several challenges that created roadblocks in transporting the ready-to-ship products from their global manufacturing hubs to local warehouses and distribution centers. The organization soon realized that it had a sub-optimal inventory holding that led to high working capital and reduced service levels. As such, they were looking at leveraging Quantzig’s inventory optimization solutions to effectively address the issues.

The Business Challenge

Multiple M&A’s in the consumer-packaged goods sector have prompted leading players to rationalize their supply chains and inventories. Though CPG players have realized that their competitive advantage relies on end-to-end supply chain management. Yet often they do not have the required domain expertise or the adequate technology to properly tune their supply chain, missing opportunities for improving business outcomes.

Ready to drive greater operational efficiency? Learn how an analytics-powered approach to inventory optimization can help you improve cross-domain interactions resulting in greater efficiecny and better performance. 

The client, a leading CPG firm operates several manufacturing units across Germany, the wide variety of product offerings increased the complexity in managing inventory levels. To address such issues, they were looking at leveraging inventory optimization methods to improve customer service levels, maximize manufacturing efficiency, and assure the best mix of inventory to maintain optimum performance.
The client faced major challenges due to:
• Frequent stockouts in some of the warehouses
• The inability to meet the service level requirements at an optimal transportation cost

Solutions Offered and Value Delivered

The challenge, in this case, was to determine the best mix of products and the optimum inventory levels that had to be maintained in certain locations to best meet the demand while managing inventory costs. To help the client tackle this challenge we developed and implemented an inventory optimization model with various service constraints and all the costs incurred by the organization. This comprehensive approach to inventory optimization was carried out in two phases with differentiated service levels and multi-echelon inventory optimization solutions that helped the client to determine the adequate inventory levels that had to be maintained at different nodes in the distribution network.

Why Opt for Quantzig’s Inventory Optimization Services?

Quantzig’s advanced inventory optimization solutions are designed to meet the complex forecasting, inventory planning, procurement, and distribution requirements of expansive, global multi-facility manufacturing firms.

inventory optimization

Quantzig’s inventory optimization solutions also empowered the client to:
• Identify 45% savings in inventory holding costs
• Maintain their operating inventory levels to support demand and free up $2M in working capital
• Minimize the number of cross-docking points to meet SLA’s within particular zones

To gain a leading edge in the CPG industry it’s essential to sharpen your strategy and create a roadmap for future developments. Get in touch to know how we can help you create a roadmap and offer recommendations for supplier management, inventory optimization, product assortment, planning, store allocation, and logistics management.

warehouse inventory management

6 Best Practices for Warehouse Inventory Management

Any small-to-medium sized business follows a core business practice of monitoring inventory levels accurately. But when it comes to supplying products through multiple channels on time, businesses do find it challenging. The constant pressure from several buyers and various store locations make it difficult for businesses to keep up with the market demands while monitoring the needs of their customers and the process of inventory. This is why businesses need to have a proper warehouse inventory management practice in place.

A proper warehouse inventory management system is the key to deliver efficiency and maintain a competitive position in the marketplace effectively. Businesses must focus on following best practices for warehouse management in order to move towards an effective inventory optimization approach and eliminate labour-intensive traditional methods.

At Quantzig, we understand the importance of effective warehouse inventory management and the difference it can create in driving optimum business results. And to help companies deal with inventory management challenges at the deepest level, our team of experts have highlighted some of the warehouse inventory management best practices that can guide in expanding product portfolios and supply chains. Also, these practices can assist organizations to boost their service levels and free up time for employees to concentrate on value-adding tasks.

Are you looking for ways to optimize your warehouse inventory? Request a FREE proposal now to know how our inventory management analytics solutions can help you.

Warehouse Inventory Management Best Practices

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