Inventory Optimization Solution

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One of the many buzzwords in the business community is Inventory Optimization. If you’re like most people, you’re probably asking, “What is Inventory Optimization? Is it a software category, a business strategy, a goal for businesses to achieve or something dreamed up by a mad inventory scientist on the planet Barsoom?” The answer is all of the above — well, not really, it wasn’t invented on another world. However, a business owner with a lot of inventory in a lot of locations might think it is totally alien.

One high-brow definition from inventory academia (yes, there are guys with PhDs that study and write about inventory management) states that inventory optimization is “The derivation of stocking levels throughout the supply planning network based upon service level input.” Now I’m pretty sure that is alien-speak! In real human-speak inventory optimization is simply keeping your inventory at reasonable levels to meet your business demands without compromising your ability to deliver whatever it is you sell. Other phrases used to describe inventory optimization are Supply Chain Management or Supply-Demand Balancing.


Whether we use the term Inventory Optimization, Supply Chain Management or Supply-Demand Balancing, we should all agree that “optimizing” inventory levels for a business is a very good thing. In fact, the ultimate goal of inventory optimization is having the right amount of inventory in just the right places to meet customer service and revenue goals — but no more than that. Without inventory optimization, your inventory levels can skyrocket out of control so that you have way too much inventory or not enough to meet your business demands — both of these are bad!

Inventory Optimization can be achieved through a fairly new and hot software solution that has been adopted by a growing number of companies to effectively manage their inventory levels. In a nutshell, Inventory Optimization Software seeks to do three primary things:

  1. Evaluate inventory levels holistically across the entire supply chain, considering the impact inventories at any given level or “echelon” have on other upstream or downstream levels. This includes raw materials and component inventories through internal channels and, in some cases, all the way down to the retail shelf.
  2. Optimize and continually update safety stock levels across these echelons.
  3. Take into account the impact of variability in demand or supply chains in recommending inventory levels.

Given the increasingly brutal level of competition a business may face, gaining even a small edge by having an optimized inventory can pay huge dividends both to the business customer and to the business itself in increased efficiency and revenue.

Fishbowl Manufacturing and Fishbowl Warehouse are the most efficient and powerful Inventory Optimization Solutions for small and medium businesses. It integrates seamlessly with QuickBooks, allowing your business to stay with the accounting software you are already familiar with while also taking your business and inventory to a highly optimized level.

The Fishbowl website has several tools to help you calculate your inventory supply needs, as well as allow you to determine your ROI when you purchase Fishbowl.

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An inventory solution can help businesses optimize their inventory in a number of ways, including these three:

  • Evaluate vendors, order fulfillment, shipping, and other aspects of the supply chain.
  • Maintain a safety stock for each item to ensure nothing runs out at a critical time.
  • Spot seasonal trends in demand to adjust inventory levels for certain items at different times of the year.

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