Business Leaders Rely on SAP for Better Enterprise Inventory Planning, Tracking, Control and Management Solutions describes Inventory Planning as “The process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity. Inventory planning has a direct impact a company’s cash flow and profit margins especially for smaller businesses that rely upon a quick turnover of goods or materials.”  (1)

Obviously, inventory tracking is an essential component of inventory planning and selection of the best inventory tracking software for your enterprise is no easy task. For a variety of reasons, it is imperative that business entities protect against supply chain inefficiencies. For that reason, more and more businesses have adopted inventory optimization so as to increase efficiency and lower supply costs. This tool helps to improve inventory management as required to deal with the changing complexities inherent in local and national supply chains.

SAP® Enterprise Inventory Optimization application facilitates a process by which company officers and employees can collaborate with third parties in order to help planners more accurately predict future demand patterns. In addition, an option is available that provides executive-level analytics and reporting using a focused dashboard.

Conventional approaches to inventory planning are based largely on rules of thumb. Planners develop a set of criteria for assessing safety stock levels, and these rules get handed down. Some organizations also use rudimentary analysis, in which items are weighted on an A-B-C scale with the priority of keeping A-level items in stock. The assumptions made for this sort of analysis, however, are seldom revisited.

In fast-changing environments, this method can contribute to out-of-stock situations and supply chain inefficiencies. The difficulties and uncertainties related to the ever evolving global and local supply chains create the need for steadily evolving new approaches. The inventory optimization approach augments existing enterprise resource planning (ERP) and advanced planning and scheduling systems, helping planners improve operational inventory targets. That results in more accurate demand predictions that allow planners to adjust inventory and reduce carrying costs without impacting customer service levels or sacrificing product availability. This allows businesses and organizations to enhance performance and more effectively meet the terms of service-level agreements.

The Optimization application addresses these requirements so as to help organizations strike the right balance between service levels and inventory investment. The application can be used on a stand-alone basis, if desired, or as an integrated part of the SAP ERP application or the SAP Advanced Planning & Optimization component. In either case, it enables planners to dynamically determine optimal demand driven, time-phased inventory targets for every item at every location throughout the supply chain.

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Cornerstone Consulting Specializes in SAP ERP for Growing Small and Midsized Businesses, Related Services, Technical Support and Optimal Enterprise Performance

Why do so many growing Manufacturing, Online Retail and/or Wholesale Distribution businesses located in FL, as well as companies located through out the U.S., rely on Cornerstone for ERP systems, related services and technical support? As an award-winning Top Value Added Reseller and SAP Gold Partner,  simply stated, our expertise is superior. Cornerstone Consulting has been providing state-of-the-art business software systems, as well as related technical support, to small and midsized manufacturing and wholesale distribution enterprises for more than thirty years.

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