When you think about how to plan inventory, do you automatically think about inventory planning software? While inventory planning software can help you forecast demand to make more accurate inventory selections, it’s not the only solution to the question of how to develop an inventory plan. In fact, it’s not even necessarily the most effective solution.
Inventory planning software can help forecast and manage inventory, but it doesn’t help with the inception and development phase of the product lifecycle. Most inventory planning software doesn’t help with the sales process, either.
Feeling a bit disillusioned? Let’s take a deeper look at your inventory planning options, and how to facilitate the entire process with ease.
Inventory management VS inventory planning
We’re about to take a deep dive into inventory planning, but we need to knock this out quickly before we do: Inventory planning software and inventory management software are two very different things. Inventory management software contains an umbrella of functionalities that inventory planning also falls under. Inventory management software functions may include:
-Supply chain management.
-Sourcing product components - this is also a function of the top product lifecycle management software.
-Managing relationships with buyers/suppliers.
-Reviewing historical data.
Inventory planning, on the other hand, simply focuses on ordering and replenishing inventory. To plan inventory effectively, you first need to take lead time, i.e. the time from when a buyer orders or re-orders an item until it's on hand, into account. Equally important is the time it takes to confirm the purchase order, which also isn’t facilitated by traditional inventory planning software.
What is inventory planning?
Retail inventory growth has long outpaced sales growth. Major department stores are still strategizing on how to chip away at their post pandemic inventory surplus –– whether through offering discounts, gifts with purchase, online flash sales, or selling to liquidators. In this environment of excess, retail teams don’t need more inventory, but rather the right inventory investments to drive sales.
If you’re figuring out how to plan inventory for your retail business, the first thing you need to know is that inventory planning starts with time. There’s no shortage of available options for how to develop an inventory plan. Inventory planning software can help with identifying gaps, sourcing inventory, and tracking performance. The tools offered by inventory planning software, however, are just the beginning. They lack the communication and customization capabilities necessary to give buyers their time back throughout the quoting process.
Buyers need time to check inventory levels, review historical purchase data, cross reference historical data with current trends, and communicate with sellers. Yet most buyers spend around 75% of their time mired in unnecessary clerical work. Instead of spending time with products or communicating with stakeholders, they’re entering and re-entering product data into emails, Excel documents, and product orders.
How to develop an inventory plan
Now that you know what inventory planning is, let’s talk about how to plan inventory. Global supply chains are still incredibly volatile in 2023. The days of buyers making sourcing decisions by going with their gut and a Hail Mary are long gone. The right inventory planning software should help you reduce merchandise storage costs, prevent delays, reduce shipping expenses, and ensure that there is always the right stock level to meet consumer demand. The right inventory planning software makes the overstocks and understocks that plague much of the retail industry obsolete.
The inventory planning process goes beyond just reviewing historical sales data and using past performance to set expectations for upcoming seasons. It also includes studying the competition, setting markdowns and promotions based on past performance, and re-forecasting regularly to reflect trends, weather and global events.
Unified product collaboration platforms VS inventory planning software
Although it’s effective in increasing margins and improving inventory sell through rates, inventory planning software doesn’t give your buying team time back throughout the sales process. Buyers need time to review historical data, interface with stakeholders, research trends, and execute their strategy. Most inventory planning software, and even inventory management software, doesn’t reduce clerical work to give buying teams their time back. However, the top product lifecycle management software suites do just that.
Traditional PLM software focuses on phase 1 through 4 of the inventory planning process. However, out of the top product lifecycle management software, only one solution offers integrated product information management and customer relationship management. That's Surefront’s Unified Product Collaboration Platform, which includes tools to facilitate the sales and listing process. With these tools, we help retail teams achieve 10x faster quote customization, and our product syndication feature lets teams customize product listings for 100s of eCommerce sites in seconds flat.
You don’t want your data to be siloed. Your company’s CRM, PIM and PLM solutions shouldn’t operate in a vacuum, either. Surefront is a Unified Product Collaboration Platform to power growth and ROI. Our patented PIM, CRM, and PLM solutions streamline the omni channel sales, merchandising and product development processes. By combining these essential functionalities, Surefront creates a single source of truth throughout your product lifecycle, sales and listing processes.
The results? Up to 150% more revenue per employee and a 40% shorter product development cycle is just the beginning. Try our 10x ROI calculator to see your company’s potential profits. Or, skip the noise and book a custom demo with one of our unified product collaboration management experts today. The retail industry evolves quickly and has a lot of moving parts. We do all of the research, so you don’t have to. Stay ahead of market fluctuations, trends and new features by subscribing to our Unified Product Collaboration Management Blog.