Inventory is one of the most valuable assets of any business but maintaining the right amount of inventory, especially during a crisis, can be a significant challenge. In inventory-intensive sectors like retail, food service, and manufacturing, inputs and final products are the core of the business. As consumer buying behavior has shifted, many businesses have experienced inventory issues like never before.
While inventory is thought to be an asset, it can also be considered a liability. Having a large inventory can be risky due to holding costs and the risk of inventory becoming obsolete. At the same time, having too little inventory can cause businesses to miss out on sales. Inventory management reduces these associated costs and risks by ensuring that the right inventory is distributed in the right amounts, to the right locations, and at the right time.
In today’s highly competitive environment with fluctuating markets, inventory forecasting plays a vital role in inventory management. It enables you to predict how much inventory you should have to accommodate future needs. Being able to accurately predict inventory levels can provide considerable benefits to any business.
In order to generate accurate and reliable forecasts, you’ll need to pull insights from a number of data sources. Currently, most businesses rely on limited internal data sources and hindsight guesswork to forecast inventory. This often results in inaccurate and unreliable predictions.
For the most accurate predictions, inventory forecasting should incorporate sales history and past inventory data along with data from external sources like real-time market trends. Due to the dramatic changes brought about by this pandemic, historic data may no longer apply as much – so incorporating new, external data is vital to success.
One of the primary metrics that inventory forecasting uses is sales velocity. Sales velocity is the rate at which a business can sell its products. Velocity tracking can identify a business’s fastest and slowest selling products. This data can help drive smart decisions around which products a business should have on hand.
Inventory forecasts incorporate fluctuations in demand in the months leading up to the forecast period and what demand looked like during similar periods. This data can help you ensure you have the minimum amount of inventory needed to meet future demand. Today, businesses emerging from the crisis may rely on historical trends over a shorter period of time – week over week or month over month.
Inventory forecasts account for the seasonal fluctuations or patterns that reoccur or repeat over a one-year period. Seasonal fluctuations can be behavior that impacts buying behavior, for example, Black Friday when people tend to buy more. Seasonal fluctuations can also be more directly related with external factors like the weather, for example before hurricanes when people rush out to buy essentials like water bottles and toilet paper.
Inventory forecasting provides access to accurate and reliable predictions of demand. This enables businesses like yours to foresee which products and how much product will be needed in the future. Otherwise, they risk not being able to meet future demand which could cause them to miss out on sales and hurt their relationship with customers.
Inventory forecasting can also tell you which products are most and least likely to sell in a future time period. With this information, you can make decisions around which products to order and actively stock and which products to forgo. These decisions can prevent overstocking of products that are not predicted to sell in the future and in turn help businesses eliminate inventory storage costs.
Finally, inventory forecasting can expose products that are not likely to sell or to sell more slowly than others. This gives you the opportunity to re-purpose items or bundle them with other better and faster selling products, helping to reduce product waste or obsolescence.
If you’re interested in incorporating accurate industry forecasting analytics into your business, contact us. Our experts in data science and analytics are ready to help steer your organization through the current storm and set you on course for a better future. Find out how else we are helping businesses ADAPT.
CCG understood our project needs very well, they are very responsive and we could not ask for anything more. The solution they provided fit perfectly with our expectations and business goals.GOP Data TrustChief Data Officer
I cannot overstate the delight we experienced from the outcome of our project. I would not only recommend CCG to any company, but question why they would engage with anyone but CCG.PgiDirector of Customer Success
Working with CCG is like working with extended team members. Consultants become an integral part of the work bringing expertise for cutting edge design and development.Hillsborough County Public SchoolsChief Information and Technology Officer
CCG's team is positive and eager. They are a great big bunch of wonderful people trying to make a difference.Hillsborough County Public SchoolsDepartment Manager
I knew CCG's technical expertise and dedication to quality results would be invaluable to our project success based on our past partnerships. We could not have implemented in the short timeframe like we did without their assistance. CCG is #1 on my speed dial for successful project implementation.InCommDirector, Financial Information Systems
It was evident from the onset of negotiations through the implementation that CCG took their role in the partnership to heart and we believe it has been instrumental in our success.Interval InternationalDirector of Marketing
CCG works very hard to understand and align with our needs. It truly feels as though we are on the same team!Fortune 500 HomebuilderBI Manager
CCG came to our company in a time of much change. Their team partnered with ours, continually delivering with professionalism and efficiency. We would not be where we are today without the expertise CCG brought to the project.PSCU Financial ServicesSenior Program Manager
CCG has a good industry knowledge, we are very happy that we chose to work with CCG. They have been a great help strategically and are helping us make important decisions.Minneapolis Public SchoolsHuman Capital Coordinator
Other Vendors use the word Partnership, but CCG actually means what they say. I can’t thank them enough for their professionalism and willingness to work with us as a true Partner, not just another vendor.PODSCIO
Our CCG Consultants are total rock stars: very thorough with a solid knowledge of the financial services industry. As a bonus, they are very easy to get along with – a great fit for our team.Raymond James Financial ServicesSenior Manager of Enterprise Data
CCG's team are all amazing. Thank you, CCG, for all that you do to make us great and keep our credit unions moving forward!PSCU Financial ServicesVP Enterprise Analytics & BI
Other Vendors use the word Partnership, but CCG actually means what they say. I can’t thank them enough for their professionalism and willingness to work with us as a true Partner, not just another vendor.PODSChief Information Officer
CCG's Team is very professional and responsive. They are making our job very easy.Rollins, Inc.Senior BI Analyst
CCG did an excellent job! Their team was very flexible. They gave us everything we asked for and then some.Rooms To GoSenior BI Architect
I'm amazed at the talent at CCG, not just the skillset - they're really good people. We've already referred them once and will do so again!Ruth's Chris Hospitality GroupCIO
CCG did a great job! We're extremely impressed with what was built in a short time. CCG has delivered ahead of time and with best practices, it's been a pleasure to work with them.VologyVP of Analytics
2502 N. Rocky Point Drive, #650, Tampa, FL 33607
Phone: 813.968.3238 | Fax: 813.200.1357
8000 Avalon Blvd. Suite #100, Alpharetta, GA
Phone: 404.328.7298 | Fax: 813.200.1357