Inventory Planning Software: Can It Help Beat Covid-19?


Trailblazer: Audrey Walby, Founder, Safio Solutions

The trail she's blazing: Sales analysis, forecasting and inventory planning software that improves forecast accuracy, aligns inventory with demand, and enhances profitability. The below article is a summary of the Podcast Interview.

The Port of Los Angeles is one of the busiest ports in the world. It handles 20% of all cargo coming into the US. But as of March 2021, dozens of container ships sat in anchor waiting to enter the port and unload. Going forward, businesses are facing a 6-month backlog. But the impact will not be due to poor demand planning says planning expert, Audrey Walby. "You always have unknowns," Still, she recommends starting demand planning sooner rather than later.

"Poor cash flow is the number one reason companies go out of business," Walby stated. In this interview, she advises who should be using demand planning. Then she explains the advantages and provides tips on how to get started.

Q - What is customer demand planning?

A - Customer demand planning is the science of using the information you have at hand. It lets you predict the future of what stock you should be buying. This lets you optimize your inventory management and your cash flow.

"Excel spreadsheets can lock up if there is too much data."

What makes it so difficult is that proper forecasting requires vital data. This data is often gathered from many sources and comes in various formats. Most companies don't have a process other than Excel spreadsheets.

Using Excel is a painful process because it involves V-lookups and inconsistent formatting. What's worse, your Excel spreadsheets can lock up if there is too much data.

Q - How has Covid-19 affected customer demand in the US?

A - Covid-19 has produced a shift in business from traditional stores to E-commerce. It has also created a big disruption to the supply chain. Many overseas countries and factories closed down for many weeks. When that happens it creates a disruption in shipping containers.

"It's a problem. Everybody wants to get their goods into port."

Everything was flowing along before Covid-19. Now a lot of the factories that stopped are starting - and they need containers. But the containers are in the wrong place and everybody's trying to get their goods into the country.

We have clients who know their goods are in the cargo ships off the coast. They're desperate to get them into port. But it's a problem because everybody wants to get their goods into port.

It should settle down at some point. But it's a big disruption because you have empty ships where they shouldn't be and full ships that are backlogged. It's all caused by the factory shutdowns and the disruption in the supply chain.

I would say a lot of clients did proper demand planning. But you always have unknowns. Or as we call them, anomalies in the business.

Q - What problems does this create?

A - Businesses planned and expected their merchandise to hit the docks at a certain time. Now that's backed up as much as three or four weeks. The ripple effect is that their goods are off the coast.

"It's very frustrating to see your merchandise offshore and know your clients need it."

Some of our clients supply Target and pet stores. But the shelves at Target and the pet stores are empty because demand has emptied the shelves. It's very frustrating to see your stock offshore and know your clients need it.

Q - How should an E-commerce business get started with demand planning?

A - The sooner you get started with demand planning the better. It will help you organize your information flow. This gives you visibility into your cash flow so you'll be able to see the trends and be able to buy the correct products.

"It's important right from the beginning to have a process in place."

Small companies starting out don't have that vision. Often, inventory management mistakes are made. You may the wrong quantities of an item or the wrong item altogether. Then your cash flow becomes tied up. And poor cash flow is the number one reason that companies go out of business.

It's important right from the beginning to have a process in place. You have the vision to know you're buying the right products because you can see the trends. You can provide your clients with the right product at the right time to manage your inventory levels and manage your cash flow.

Q - What goes into creating an accurate forecast?

A - You need many different data types to create an accurate forecast. You need to know your inventory levels and what purchase orders are going out to your vendors. You must also know what sales orders are coming into the system.

"Alerts can tell you when a product is selling well so you can order more."

Even if you're a smaller merchant and you only sell on, these data types are important. You also need data on outbound shipments and your vendor information. Vendor information is critical for utilizing lead times. Then you can utilize alerts to tell you when a product is selling well so you can order more.

These alerts also let you know if a product is not performing as expected. Then you may want to take a mark-down. If you're selling on Shopify, customer information lets you create heat maps. These show what to market in specific areas. Larger companies can learn who they should supply and what their future margins will be.

Q - How does the Safio inventory management software work?

A - The Safio solution combines the mix of data into our forecasting tool. This includes data analytics that lets you make better strategic business decisions.

Our inventory management software alerts pick up your vendor lead times and alert you when you're running out of something or it's not performing well. As well, there are forecasting scenarios that let you compare different forecasts. This lets you see what's going on so you have the confidence to know your forecast is on track.

"Enterprise customers can roll this up and compare demand to account forecasts."

We also have a salesforce forecast area. Here, different sales forces can enter their account forecasts. And enterprise customers can roll this up and compare demand to account forecasts.

Our professional planners know how to set you up for the best results, too. Our team manages the initial onboarding process for companies of all sizes.

Q - Who is the Safio solution for?

A - We help three types of businesses. These include E-commerce Retailers if you're a merchant on Shopify. We also help Wholesale Distributors who do E-commerce and supply big box stores like Target and Best Buy. Then we help Distributors.

"Safio works well for consumer product finished good businesses."

Safio works well for consumer product finished good businesses. These types of firms have inventory requirements and must meet purchase order contracts.

Q - What's involved in a Safio inventory planning software implementation?

A - First, we need to work with our client to identify the true source of record. For E-commerce, there could be many sources such as Shopify or 3PL for certain information. Or, it could be Quickbooks for wholesale purchase orders.

Next, we connect and bring your data into our forecasting platform. Here you can see the data and demand all in one place. This might be from Quickbooks, wholesale purchase orders, or a Shopify online order. An enterprise with many warehouses may see orders coming in from Walmart or Target.

"Safio stops you from buying the wrong things."

Then we look at your products and identify the key attributes that are important for recognizing trends. For example, if you're selling a shoe, it may have attributes such as color, size, style, and material. Or there may be various types of closures such as Velcro, lace-up, or a slip-on.

These attributes are important for identifying trends and choosing the right mix going forward. In the shoe example, sixty percent of buyers may want Velcro for their kid's shoes. If so, then that's the kind you should be buying. And at about the sixty percent range.

Safio inventory management software also stops you from buying the wrong things. A vendor may put lace-up shoes on sale to lure you in. But you wouldn't want to overbuy them if most of your customers want Velcro. That's the type of information our planning team looks for when we're getting you set up.

"They realized cash savings to the bottom line of a million dollars. It was a twenty-times ROI."

Our team helps you optimize inventory management and spot trends by identifying the proper attributes. Once we have your information in our forecasting platform, we have data analytics. We white-label these through Tableau to give you custom reports.

These visual reports let you see what's going on so you can take the proper actions. We can create various specialized reports, be they financial, sales, or bill of materials. And we bring it all together so that you can see what's really going on in your business.

A - We had a client with a seasonal business who had roughly 20,000 SKUs (stock-keeping units). We identified their product attributes and grouped them together to optimize their inventory. In the first year, they realized cash savings to the bottom line of a million dollars. It was a twenty-times return on investment.

"Optimizing your inventory management and sales is what Safio does well."

We helped this Halloween company by identifying its important attributes. So for example, they may have had eight versions of a witch's costume. In theory, three of them made up eighty percent of the business. So they could get rid of the other five to optimize their inventory management.

Their sales remained the same. But they reduced their inventory from twenty million dollars down to eleven. This saved them the unnecessary cost of carrying and managing all that extra inventory.

Another client in the fashion business introduced a pair of seasonal fitness shorts. Sales were fantastic after the first shipment arrived in March. Then their Safio solution alerted them they could sell double the amount within the time remaining.

They were able to get the product made and shipped in ten days. The result was they tripled their original sales goal. Their inventory planning software alert gave them the confidence to go ahead and make that buy based on what their forecasting system was telling. Optimizing your inventory management and sales is what Safio does well.

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Derek Little

Derek Little

CEO or and Chief Podcasting Officer of TechnologyTrailblazers.Club

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