The previous 2 posts of this 4-part series explored what to look for in Inventory Management Systems, when to invest in them and how Barcoding Softwares interact with IMSs.
Once you have invested in the right inventory and barcoding systems and integrated with your core single-sign-on supply chain platform, you will start to collect and process massive amounts of data. This inventory data on its own, as well as when combined with data flowing in from other parts of the supply chain can provide powerful descriptive and diagnostic reports. Studying and actioning decisions based off these reports can have huge positive impact on improving lead times, optimizing inventory volumes, and improving margins. It is often tough to understand how to quantify ROI from software investments. Studying analytics reports and driving actions off them help quantify the exponential returns from any SaaS investment, including in inventory and barcoding software.
Here are the most popular reports used by our customers:
1. Split shipment tracking and reconciliation
In 99% of shipments, the purchase order does not match the shipped quantity. Most shipments are split and shipped by manufacturer. Since purchase orders have multiple products and SKUs, and each SKU can ship in partials, tracking and reporting on the split shipments and corresponding reconciliation becomes essential for every business. These reports then link to invoices to be paid to the vendors, so vendors are paid only for what has been shipped and received at the warehouse. Mid-sized and enterprise companies lose millions of dollars each by not tracking split shipments and because of mismanaged reconciliation. This set of reports is one of the most critical to populate and study in real time because of its impact on margins.
2. Sales versus shipped orders; mismatched inventory reports
A simple report drawing up differences between sales and shipped inventory can provide valuable insights to action on. When sales are high, but inventory is not shipped on time, or worse not shipped at all because of low stock, revenue is lost. And correspondingly, customer satisfaction is negatively impacted. On the other hand, if sales are low against SKUs that carry high stock levels, then inventory carrying costs are high and there are also the manufacturing sunk costs to consider. This situation drastically impacts margins. While a comparison of sales versus shipped inventory seems simple enough, most companies do not have these 2 sets of data integrated into a single platform. Even if both data sets are available, companies lack real time intuitive reports to feed this data in actionable format.
3. Demand planning reports and stock levels
Before investing in full-fledged predictive demand planning systems, much can be accomplished with intuitive and smart demand planning reports. Step 1 is to build, and study reports as described in (2) above. By keeping sales a constant or adding a % for growth, and then inserting a formula to reduce the percentage difference between sales order quantities and inventory quantities shipped, reports can generate the optimized levels of demand to stock. These dashboards can simultaneously have positive impacts on margins and revenue. Our GRID team internally call this set the magician reports.
4. New product inventory planning
So far, we spoke about powerful inventory reports and dashboards generated off historic data. But what about when planning inventory for new products and SKUs that do not have historic sales and inventory data available? This is where integrating inventory data with product level characteristics becomes indispensable. Having systems and data sets connected across the entire length of the value chain is critical; the more the connection points, and the better integrated the data across a single unifying platform, the higher the business impacts. By generating reports that list products and SKUs with comparable/like characteristics across costs, style details, colors, category, sales channel and more, early years’ demand and inventory for new products and SKUs required can be deduced.
5. Inventory lead time reports
Delayed shipments are worse than no inventory since they impact customer satisfaction. Best performing SKUs should be rated based on on-time shipments and sales orders both. This is another use case for connected data sets, since tracking on time shipments does not start at the warehouse but much before. Delayed inventory shipped to customers could be because of complex product characteristics, manufacturing delays, freights delays, or 3PL tardiness. Reports and dashboards that breakup total lead time across manufacturing, delivery to warehouse and shipment to end customer provide valuable information to help identify the part of the supply chain causing the delay.
Suuchi Ramesh founded Suuchi Inc. 4 years ago after a 12 year career in technology and predictive data analytics. Before starting Suuchi Inc., Suuchi had scaled the B2B side of multiple tech startups from zero to nearly $30 million. Suuchi now plans to do the same with the GRID. The Suuchi GRID is an intuitive software solution that digitizes the entire supply chain, empowering participation, and providing a single source of truth across suppliers, factories, brands, retailers, warehouses, and customers.