What is Forecasting Automation

When we first started Inventoro, we released a very lean product and always thought we would only add new features if our clients requested them. Our product strategy has been built around this principle from day one, and throughout the time we have managed to build new functionalities that can make our client’s lives easier.

Forecasting your inventory is part of the drill. While you’re expected to do it day in, day out—it doesn’t mean you have to be actively involved. As an entrepreneur, you’re busy growing your business. Automation makes it possible to fit forecasting into your routine and enjoy up-to-date information you can use to serve your customers better and increase your bottom line.

We’ve already underlined the value of sales forecasting, which is the core service of Inventoro. But it’s possible to generate more accurate, efficient, and easier forecasts with automation. We work to constantly refine this part of your business, starting with the rollout of these exciting new features:

• Merge orders
• Bundles
• In transit
• Custom reports
• Inventory forecasting
• Forecast adjustments

Merge orders

Inventory works like this: you order stuff, you receive it, you sell it over time, and repeat. If you visualize an inventory graph for each SKU, it would look a lot like a saw because of the repeating pattern:

This image is called the SawTooths graph (also known as SawTooths diagram or model) which serves as a representation of your future inventory. If it looks a wee bit familiar, that’s because this is what our logo is modeled after.

Conservatively, you only place orders for goods that will be needed within a short period of time so you can meet immediate customer demand. You order goods for one week, it sells out, so you order again the next week, and so on.

With Inventoro, you can see these order proposals for each week (saw peaks) that our system can provide one year in advance. Accordingly, if you were to look at our replenishment proposal list and set the time period for 12 months, the system would recommend 52 orders for the same product at the same warehouse–only the proposed order dates would differ).

That’s the main reason why we added the “Merge Orders” function, which you can find above the replenishment table. It enables you to see a solid inventory replenishment plan for 12 months ahead. Using this information, you can negotiate a better deal with your supplier on some of your products.

It’s as easy as toggling a button. To understand why this can be beneficial, consider that our purchase order suggestions are based on the real lead time of your chosen period (6 months or 12 years). When you’ve got “Merge Orders” turned on, what you’ll see is the sum of all these orders. If it’s a pretty good number, your suppliers will be hard-pressed to refuse if you negotiate a sweeter deal in return for a long-term relationship.

Since retailers rely on bundles, we figured our system should be able to replenish them as well. If you sell in bundles, ordering in bundles will reduce your workload. Imagine being able to click one button and have all the ingredients to your favorite cookie recipe ready and waiting for you. Now imagine this functionality when preparing your lists. We’ll you don’t need to let your imagination run wild. We’ve decided to create “Bundles” to streamline your inventory management and make it a natural process for you.

In the strategy section of our app, you will find a section called Bundles. Tap the tab and you’ll end up in an easy-to-use Bundle maker. When replenishing, the system will automatically take bundles into account. This nifty little trick will make sure that your bundles remain readily available even if the items come from different suppliers. No need to worry about lead times, either.

In transit

It’s clear from the name what this feature does. This was one of our first new features to improve our product. When you create a purchase, there is an obvious time delay before that order turns into your inventory stock.

Our “In transit” feature links directly to our replenishment page. Once you create a purchase order in Inventory, it automatically becomes an “In transit” item. You can then later change the status of goods through the supply chain on the Draft page–from in-transit to received:

In the replenishment list, the system will stop recommending you to purchase these items as soon as it knows the items are in transit.

In some cases, we can drag the “In transit” status of the purchase order directly from the original source. The rule doesn’t apply to all systems, so you’ll have to track it manually with some. Feel free to chat with us if you have any questions.

Here is a secret tip: if you mark all items which need to be ordered and press the Create Purchase Order button in the replenishment list, the system will create a handful of purchase orders divided by supplier and warehouse destination. That’s a lot of mundane manual work done in a single click.

Custom reports

Our goal is to keep your inventory as simple as possible. As part of our mission, we strive to provide simple tools to help as many SMEs as possible. In comparison to all the information we can pull from our database, the data you see is just the tip of the iceberg.

The remaining mountain of information would only make things complicated since they’re mostly irrelevant to everyday tasks.

Nevertheless, every business has its own needs, and sometimes a special report is needed. For this reason, we have created a handful of ready-made popular reports already prepared for you in the Reports section of our product. In fact, the “potential stockouts” report is becoming increasingly popular among our customers.

Our list of free reports is constantly growing. But if you need a special report, please let us know and we’ll have it ready for you.

Inventory forecasting

Sales forecasting and inventory forecasting are closely related, with one exception. You generally want your sales forecast to go up and your inventory forecast to go down. The best case scenario would be for both to occur simultaneously.

Most entrepreneurs assume that the more you sell, the more inventory you’ll need. But at Inventoro, we know otherwise. It’s estimated that fifty percent of your inventory is obsolete and you don’t need to stockpile so much inventory to meet demand. That’s why we’re here, to help you reduce inventory, while you keep your service level (or availability of goods for sale) as high as possible.

We want to show you how your inventory will drop, if you use our forecasting algorithms. To make our master forecasting graph more visual, we’ve added a red curve. This little addition shows you how your inventory levels will change over time.

This information is handy in many ways. It’s especially important to keep this in mind when planning your cash flow or renting a new warehouse. When using Inventoro, a typical client can increase warehouse space availability without compromising on growth.

This information is handy in many ways. It’s especially important to keep this in mind when planning your cash flow or renting a new warehouse. When using Inventoro, a typical client can increase warehouse space availability without compromising on growth.

Forecast adjustments

Inventoro allows you to forecast data using a variety of mathematical and statistical methods. On top of that, we have deep learning methods embedded in our system to help you predict inventory levels–even during intermittent demand and sporadic sales.

And our algorithms do a fine job in predicting future demand if they follow similar dynamics. They can also adjust to fast, dramatic change in sales. Once a new unexpected peak occurs, the system will recalculate itself immediately and give you excellent results even if unexpected events occur (like the global pandemic, for example).

So even we’ve got everything covered, we wouldn’t want to take away the opportunity to get involved–especially since it’s you who run your business. If you’re anticipating a spike or decrease in customer demand, use our forecasting adjustments to prepare accordingly every month. It’s as easy as changing the trend percentage.

We understand that some spikes are expected and planned. Any time you know your sales will dramatically increase (or drop), it’s best to let the system know. Whenever you want to plan a big advertising campaign or open a new point of sale, for example, this can be very helpful.

In such cases, you can rely on our forecast adjustment tool–it sits above the forecast graph. The easy to set up table will give you two options: “change” or “trend”.

The Change adjustment option adjusts the forecast overnight, so expect a large boost or decrease. The Trend adjustment option, on the other hand, delivers a steadily rising or falling curve. Use the dates to determine when the forecast adjustment should be valid, hit save–et voila! You’re good to go.