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PANDEMIC ERA INVENTORY MANAGEMENT ISSUES?

How Are You Managing Your Inventory During and after COVID?

The ongoing Coronavirus pandemic and its aftermath continue to impact companies’ inventories in many different ways. Some businesses are experiencing large decreases in sales in all items and locations, and some just in specific locations or product groups, while others have experienced the exact opposite and have registered large increases.

 
 

Is Historical Usage the Right History?

A key pillar of inventory management is creating a statistical forecast based on your company’s historical usage. In the pandemic and post-pandemic era, this can be a challenge.

The problem: When we look ahead to a post-pandemic time, the historical usage recorded in the months of the pandemic will generate a forecast that does not necessarily match “normal demand.”

Another problem: The standard practice of adjusting usage manually is not efficient in pandemic/post-pandemic conditions.

Consequently, inventory managers need to be on the alert and ready to adjust lead times, history, forecasts, and more.

While there is no “quick fix” COVID-19 solution to eliminate the virus’ impact on your company’s inventory management, we have worked closely with our clients to help them survive and thrive during the pandemic. Based on Demand Planning’s rich functionality, which includes the ability to run numerous reports, make automatic adjustments, and alert users to potential issues, many clients are following the steps outlined below to manage their inventory during the pandemic.

Best Practice Tips: How Demand Planning Can Help Manage
Your Inventory in Pandemic / Post-pandemic era:

  • Utilize Usage Adjust report, which compares a specified “typical” period to a specified “atypical” period, and adjusts the “atypical” period usage to be within +/- defined percentages of allowable variance from the “typical” period average usage.
  • Let the system re-forecast overnight.
  • Use the Forecast Adjust report, which enables one to adjust the current forecast by a defined + or – percentage across a number of items to account for the impact of COVID-19 on your firm’s operations.
  • Make manual forecast adjustments on any items that are exceptions to the broad-based trend.
  • Put the system’s Alerts to work:
    • Be sure to review Surplus Inventory items with Open PO alerts for purchase order line items that should be rescheduled or canceled.
    • Closely monitor Auto Forecast Adjust alerts and make adjustments as necessary for items that have exceeded the current forecast.
  • Closely monitor vendor confirmations and delivery trends. This helps to ensure you’re using the most accurate vendor lead times based upon current vendor performance.

Is Your Inventory System Dynamic Enough for the COVID Era?

The pandemic has caused many changes to our world, and inventory management is no exception.

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Need Help with Pandemic/Post-Pandemic Inventory Management?