At Stockagile we are aware that you must work to achieve efficient and effective results, such as optimizing inventory levels to improve cash flow, while improving customer service.
Inventory Analysis is a tool that providses real-time analysis of your inventory. It can help you improve inventory optimization, quickly identify overstock, understock and overall inventory status.
The use of this tool, together with an effective inventory strategy, can significantly improve your business operations and profitability.
Requirements for access to inventory analysis
- The user must have the role of STORE MANAGER, WAREHOUSE MANAGER, ECOMMERCE MANAGER, INVENTORY MANAGER or OWNER. We can see the different types of roles in the section Create or edit a user.
Purpose of Inventory Analysis
For retailers and wholesalers, inventory is the beating heart of their operations. Not only does it attract customers and generate revenue, but it also represents an investment that uses financial resources. Balancing this asset is both an opportunity and a challenge.
On customer service vs. cash flow
Every retailer familiar with inventory management understands the delicate balance between customer service and cash flow.
- Customer service, in this context, refers to the probability of satisfying a customer' s demand, i.e., having the desired product in stock when it is needed. Ideally, retailers would be able to predict perfectly when and how much a customer will buy, minimizing the need for overstocking.
However, unpredictable sales patterns often require having additional stock on hand to avoid missed sales opportunities. With limited resources (such as warehouse space, etc.) and the ultimate shelf life of products (most products will gradually or eventually lose their value over time), retailers must strategically optimize their inventory levels and cash flow while increasing customer service.
About delivery time
Supplier lead times also influence customer service and cash flow. The longer the lead time, the more stock must be kept in the warehouse to avoid lost sales while waiting for new orders to arrive. It is important to take supplier lead time into account when defining your inventory strategy.
Despite careful planning and sophisticated inventory strategies, unexpected events are inevitable. Such as a sudden increase or decrease in demand that causes stock-outs or overstocks. In these situations, you must take quick and effective action to replenish your inventory optimally, improving cash flow and customer service.
Steps to access inventory analysis
- Go to the left side menu, in the "ANALYTICS" section, and click on the section "INVENTORY".
- Please note that incomplete or incorrect product and stock data can lead to misrepresentations. To improve data accuracy, consider using our SALUD tool.
- You will see different sections that are going to be explained below.
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Historical stock levels:
- The top section shows the historical value and total number of units in your inventory. This overview allows you to quickly identify unusual trends that require further investigation.
- The blue line represents the number of units
- The vertical bars represent the total value of your stock at cost price.
- You can filter by date at the top right.
- Note that products with negative stock and/or without cost price are not included in this chart.
- Pictures summary: the following items can be filtered by warehouse, season, brand, category, subcategory and supplier if necessary.
- Available in stock: The total quantity and value of products that are currently in your stores and/or warehouses and are available for sale (this section does not include stock that has been reserved for a sale).
- Transfers in transit: The total quantity and value of products that are in transit between warehouses and/or stores.
- Purchases in transit: The total quantity and value of products arriving from purchase orders you have placed with your suppliers.
- Allocated in stock: The total quantity and value of products that are currently in your warehouse or stores, but have been reserved for a sale to a customer and are therefore not available for sale.
- There have beenincluded in red the total number of units in your stock that belong to products without cost price. These units are counted in the total number of units, however, as they have no cost price, the value of these products is equal to 0 € and, therefore, is not included in the total value of your stock.
- With the "Negative Stock" option you can choose to include the units that currently have negative stock in the totals (remember that since the number of units is negative, the value of this stock is also negative and, therefore, by including it in the analysis, the total value of your inventory will decrease!)
- Stocks by state of the product
- Two graphs in this section show how your inventory is divided between different product categories:
- Permanent: represent investments/products that are labeled as NOOS (Never Out Of Stock) and, therefore, are supposed to be available all year round.
- Assets: represent investments/products belonging to the current season and, therefore, are assumed to be available at the current time.
- Discontinued: represents investments/products belonging to past seasons and, therefore, action must be taken to liquidate this investment, since the demand for this stock is low or non-existent at the present time.
- Missing information: represents investments/products that have not been labeled with NOOS or active and discontinued dates, making it impossible to determine whether these products should be in the store at the current time or not.
- Understanding this distribution helps to plan effective strategies for liquidating discontinued stock and updating product information for stock with missing information.
- In order to optimize your cash flow, you should plan a way to liquidate your Discontinued stock to free up cash for reinvestment in more valuable practices (marketing, product development, purchase of active/NOOS products, etc.).
- Products without cost price are included in the analysis; however, as the value adds up to 0€, they are not visible in the pie chart representing the total value of your stock.
- Two graphs in this section show how your inventory is divided between different product categories:
- Active products in stock
- Four additional pie charts in this section provide information on the availability of your active or NOOS products. If stock shortages are identified for these products, it may be necessary to take immediate action to replenish stock and avoid lost sales.
- First chart: reports the availability of your NOOS catalog.
- Second graph: reports the availability of products that are part of your currently active catalog.
- In case you notice stock-outs in your active catalog, you will have to decide whether you want to place an order with your supplier. Learn more about how to handle out-of-stocks here.
- If some of your active products do not have the NOOS label or the active and discontinued dates, they will not be included in this section.
- Current stock by warehouse
- The last table of this panel shows the same information as the summary tables, divided by location (store and/or warehouse). If you want to get a detailed description of each KPI, you can find it in this article, in the "SUMMARY TABLES" section.
Conclusion
Inventory management is an ongoing challenge for all companies that handle physical stock. INVENTORY ANALYSIS provides various metrics and analysis for reactive and effective inventory management. The capabilities of this tool will help you quickly understand the most urgent actions you need to take to maximize customer service and optimize cash flow. The use of this tool, coupled with an effective inventory strategy, can significantly improve business operations and profitability.
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