Stock Optimization

Stock optimization is a problem faced by virtually every company, and is particularly important for trade organizations. Ignoring this issue causes many difficulties: lack of working assets, irregularity in warehouse operations, expiration of the goods' best-before dates, customer dissatisfaction, etc. Optimization allows reserve stock to be minimized. At the same time, the company should be able to execute all its orders in due time.

This problem is a very complicated one. Resolving it requires taking into account the specifics of procurement, storage and sales of each type of merchandise, the influence of external factors, pricing policy and many other things. The functions available in data storage systems are insufficient for this purpose, and data analysis issues become of special importance.

The best solution is to use a specialized analytical platform such as Loginom:

• Procurement optimization. An efficient way to minimize the in-stock balance is to optimize procurement. The idea is fairly simple - to purchase the exact quantity of goods that can be sold before the next procurement session. To do so, the user must first forecast the demand. Loginom includes various forecasting algorithms which allow the creation of predicative models with due account of trends, seasonality, in-stock balance, demand for accompanying goods and other factors.
• Calculation of the optimal reserve stock. Even the best prediction algorithms do not guarantee perfect results because it is impossible to take every factor into account. Real sales are always different from the predicted values. With Loginom, users can implement various strategies for calculating the reserve stock: profit maximization, purchase amount minimization, storage cost minimization, customer satisfaction improvement. etc.
• Deficiency and surplus analysis. The algorithms implemented in Loginom automatically detect deficiencies in quantity or surplus of stock, identify underlying factors, range these factors by importance and minimize related problems.
• Product range optimization. Loginom contains mechanisms that enable users to analyze interchangeable and accompanying goods, find the fastest and the slowest selling ones, and identify the products in steady and random demand. Availability of such information makes it possible to develop an optimum product range with due account of storage area availability, financial abilities, and demand for profitability.
• Managerial reports. The reporting mechanisms built into Loginom enable the management to monitor the key effectiveness indicators and use them to quickly respond to undesirable tendencies and provide alerts about any deviations from business targets.

Loginom-based solutions allow the warehouse operation effectiveness to be improved in the following ways: ensuring uninterrupted operation of the company’s divisions, avoiding mistakes and inaccuracies, improving planning, increasing turnover and reducing costs.