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Inventory forecasting software a post-Covid boon for manufacturers

Posted by Chris Thompson on May 5, 2021 1:46:25 PM
Chris Thompson

The manufacturing industry is still reeling from the effects of the pandemic. As manufacturers navigate the post-Covid landscape, they’re increasingly finding tech to be an asset they cannot live without. 

Improved visibility is one of the key reasons for this, according to the 2021 Manufacturing Industry Outlook by Deloitte.

For manufacturers, the events of 2020 may be a warning to develop better systems for navigating disruptions like the one we are currently experiencing. Visibility is likely to become the most critical capability for manufacturers in the coming months...and digital technologies could be important enablers.

As the industry continues to reel from forced shutdowns, layoffs, and decreases in productivity and factory orders, inventory forecasting software is increasingly seen as a boon for SMEs.

Making the complex simple

“StockTrim’s an essential ingredient for any manufacturer with a complex product line.” – Jos Kunnen from Times-7

Times-7 is an antenna manufacturer in New Zealand. They ship 60 products made up of 1300 individual components, some of which have lead times of 28 weeks. 

If one item is missing, it can hold up their entire assembly line. 

CEO Jos Kunnen explains that patterns of demand are hard to predict at the best of the times, even without the supply chain disruption caused by Covid. 

They were an early adopter of StockTrim, having identified its potential to help them increase visibility and avoid running out of critical stock.

They’ve seen huge benefits from automated demand planning and can now forecast 12, or even 24  months ahead, and customise forecasts for each individual product.

Bill of Materials 

Another complexity in inventory forecasting for manufacturers is the Bill of Materials. Bill of Materails, or simply BOM,  is a term for all of the parts in a finished good. 

For example, you might sell a tent that comprises 20 pegs, 8 poles, 8 ropes and a few other parts. 

When it comes to inventory forecasting, if you’re anticipating demand for 10 tents, you also need to order the components in multiples of 10. 

So 10 tents becomes 200 pegs, 80 poles, 80 ropes and so on. 

And what about if you sell the pegs individually too? You need to make sure you’ve ordered sufficient stock to cover individual sales and demand for the finished goods. 

It truly becomes a minefield when you consider that each component might have different suppliers or lead times. All of a sudden, you need a PhD to sell a tent. 

Shine Drink

Shine Drink is an Australian-based manufacturer of organic beverages. 

For them, Bill of Materials relates to about 30 ingredients with different quantities that make up each drink.

Shine Drink found it difficult to know how much of their raw ingredients they needed to order.

They also had the challenge of charting the time it was taking from when an order was placed to when the ingredients would arrive, and then for the drinks to be manufactured ready to sell off the shelf.

Having over-stocked ingredients sitting on the shelf going past their expiry date which had to be thrown out was costing the business money. 

Meanwhile, more popular ingredients would go out of stock and hold up the manufacturing process and were unable to fulfil customer orders in time. 

There has never been a better time to than right now to improve your visibility by turning to technology. A free trial with StockTrim is a great place to start.


retail stock forecasting tool
 

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