Without the right inventory, work cannot be scheduled. Cloud-based analytics can be used to connect a myriad of different environments and factors, thereby streamlining your logistics and planning. Through cloud-based analytics, you will be able to enforce better controls over production, while also optimizing the inventory.
Classifying Inventory through ABC Analysis
In ABC analysis, the most important articles of inventory (usually about 5 to 10% of your inventory) is classed as “A.” Items of secondary importance are classed as “B” and items of tertiary importance are classed as “C.” This classification system makes it easier to control your inventory at a glance.
The needs of a business change over time, so inventory will need to be periodically re-classified based on feedback received from production. Cloud-based data analytics can give you the information you need to determine which inventory items have the highest levels of demand, while taking into account complex variables such as shelf-life.
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Using Data Analytics for Demand Forecasting
In order to support production, the inventory has to be available. A common mistake in demand forecasting is to compare inventory month to month rather than month over month. When optimizing inventory for July 2018, business owners should not be referring to June 2018, but instead to July of 2017.
Further, these numbers need to be adjusted to account for the general growth year-over-year. A rudimentary example of this type of analysis might be as follows:
- May 2017 compared to May 2018 saw a 20% increase in product purchasing.
- June 2017 saw product purchasing of $20,000.
- Therefore, a business owner may want to have $20,000 + 20% in inventory available for June of 2018.
This type of analysis can be done automatically through many cloud-based forecasting suites. Not only can you drill down to multiple areas of focus, but you can also customize your analytics until they yield accurate results consistently. When it comes to production, there are so many moving parts, that big data analytics may be needed simply to visualize your forecasted demands.
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Finding the Right Business Solution
Business intelligence solutions have a lot to do with the success of a modern business, especially with something as complex as production control and optimization. Many inventory controls can be provided through automation with the right cloud-based platform, and further customized and tailored to your company’s needs.
BCS can assist you in securing and managing your technology infrastructure.
If you want to learn more about streamlining your end-to-end business operations, contact the experts at BCS.
