Inventory Optimization

If you’re a startup, inventory optimization may not be top of mind with few products and lower inventory levels to manage, but as your business grows, having those measures in place will ease transition to a bigger business operation. Optimizing your inventory begins with tools for scalability, software that your company won’t outgrow as the business grows. If that growth requires bank loans, greater investment or attracting investors, getting one’s books in order to demonstrate growth potential is a fundamental step.

How Does Inventory Optimization Begin?

Stock optimization can vary from one business model to another. For all business types, optimization is the process of attaining the right amount of inventory to minimize costs while maintaining sufficient stock on hand to meet demand and avoiding shortages.

The inventory optimization process has different “looks” for different industries; just-in-time inventory models operate with minimum quantities and that’s what works best when products are customized to customer specifications. If your product offers multiple options, production is the same up until a certain point; furniture and cars fit this characterization. SOS Inventory is a versatile inventory optimization software built to accommodate a wide variety of business models. Having the right inventory optimization tools can help any business gain more insights and greater control over productivity.

The Pitfalls of Inventory Overages

inventory optimizationThe careful balancing act of having enough inventory but not too much aims to satisfy customer orders without stocking up too much so to create waste through obsolescence or breakage. How much overage your business can tolerate depends on your industry; clothing cannot tolerate it and products are often offered at large discounts to empty overstocked shelves.

Industries coping with expirations have no room for overages as the product must be destroyed when it is no longer fresh.

If your business has steady demand year-round and your product is not subject to seasonal highs and lows, the occasional overage may be less of a concern; however, your demand is also more predictable, thus you should have an easier time balancing your inventory quantities.

To cope with the many complexities of fine tuning the equilibrium of stock on hand, SOS Inventory tracks all materials, work in progress and finished product throughout all workflow stages. There is no need to plug inventory into desktop spreadsheets when all the work is done for you, automating the tasks that keep information flowing from one department to another.

SOS Inventory makes it easy to run up to fifty different types of reports to analyze product performance and identify what may be causing your overages. You may need to:

  1. Update your minimum order quantity and trigger purchase orders automatically at a new reorder point so materials arrive at the appropriate pace.
  2. Categorize products by popularity or profitability to determine quantities to keep in stock for each type.
  3. Unload extra stock using marketing efforts.
  4. Offer customers volume discounts.
  5. Use both historical data and customer feedback to forecast demand.

As demand fluctuates or your supply chain experiences disruptions, having the ability to quickly evaluate performance facilities quicker decision-making.

Having too little inventory is equally challenging. If you run out, you can’t fill orders and miss out on sales. You must place orders to pace with lead time so there are always incoming goods to replace what’s sold and account for changes in demand.

Unusual Times Demand Extraordinary Inventory Optimization Tools

In recent years, businesses have faced unprecedented challenges between labor shortages, supply chain disruption, inflation, and unusual changes in demand. How can you compete with your fiercest competition if you’re not armed with the tools they have?

You can benefit from highly sophisticated optimization software without the exorbitant costs those competitors pay. After all, SOS Inventory was built to offer this advantage to small businesses specifically.

For starters, having accurate inventory counts from the onset will initiate all processes with correct quantities and costs. Keeping track of changes over time as materials move through different processes is the key to maintaining accurate ledger information.

While inventory software cannot replace sound business making skills, accurate data, management and reporting bolster smarter decisions.

SOS Inventory was built to perform inventory optimization tasks for your team to streamline operations, save time and money and help you stay focused on building your business.


Thousands of companies use SOS Inventory to manage their businesses.    Free trial