Are you correctly using your demand analysis to improve inventory level of your DC?

As we know, part of the efforts to maintain a profitable operation in a Distribution Center consists of having an optimal level of inventory. For this, it is necessary to take into account certain key elements such as seasonality, own variables of the supply chain such as "delivery times", "origin of the products", etc. and, very importantly, demand prediction.

Today we will focus on the demand analysis part.

Currently the best alternative to obtain very close demand predictions and maintain optimal inventory levels is the use of specialized software such as an ERP with its Demand Planning modules and a Warehouse Management System (WMS), which in turn allow for a chain of interconnected supply in its entirety.

In order to ensure the effectiveness of the demand analyzes carried out by this type of software, it is very important to verify the analysis establish the minimums and maximums of each product according to the following factors:

• Current storage capacity
• Replenishment times
• Inventory rotation at SKU level, among others

Inventory rotation at SKU level? So is. Although it is true that this KPI is usually managed in a “global” way, that is, at the level of the entire DC, many times the most convenient when demand is forecasting is that the inventory rotation is according to the products that are handled in the DC, since that gives the flexibility to know more precisely the quantity to order of each product, the correct time to order it and the necessary storage in each of the products according to their rotation.

In this way, you will be able to obtain a much more precise demand analysis to determine the adequate inventory levels to support your operation.

At G.I.Eicom we have more than 35 years of experience designing and implementing the best intralogistics process automation solutions operated under software developed with cutting-edge technology.

Don't wait any longer and contact us! One of our consultants will help you find the best solution for your needs.