When considering starting a new business or enhancing your current small or medium-sized business, inventory forecasting is crucial. Why would such a seemingly small thing as predicting what inventory you will need in the future make such a big difference in your long-term business success? Because it helps you make the most of your resources in the here and now while avoiding pitfalls that only become apparent a long way down the road.
We will get into the details of you can avoid leaving your business to chance by focusing on inventory forecasting.REPETITIVE ORDERS
Every time you purchase or sell inventory, you need a way to document incoming and outgoing orders. Sure, you can take a wild guess as to what inventory items you will move in a given week or month, but why leave such an important part of your business to chance? By using inventory software, you are able to better predict your replenishment requirements. Repetitive orders, which could also be considered standing orders, mean a customer will be purchasing the same inventory at the same interval for a long period of time. This makes reordering much easier and less demanding because it is predictable. And anything that is predictable is easy to plan for.
When reordering different products, you can't always forecast the same way. For example, let’s say you own a small business that sells winter equipment. One thing you must consider is the different times of year in which you are more or less likely to sell your goods to interested buyers. Once you have pinned that down, you can gauge how well you performed in the past years using your inventory management software. To forecast properly, you need to compare how you have performed historically during a variety of timeframes, short and long. The reorder point is looking at sales in previous Novembers, for example, and then calculating where you could be this November and ordering based on those numbers.
Inventory management software will assist you in forecasting inventory levels. Why not give yourself an edge over your competitors? Take advantage of all of the inventory forecasting features available to you and you will discover some amazing results. Use hard data to build your company and stay above the mediocrity of other companies. There is no need to remain part of the pack when you can rise above it all with a little help. Be proactive and be prepared by using Fishbowl Manufacturing or Fishbowl Warehouse!
Fishbowl offers a Forecast plugin that adds an entire module to the software focused exclusively on inventory forecasting. You can use it to study previous sales over any given period of time and then use that data to discover seasonal trends and other useful tidbits of data that will help you plan for future inventory requirements. You will be able to look ahead at prospective inventory costs and other factors that can have a big influence on your purchasing decisions.