Business Analytics
IBM Software Business Analytics
Predictive Analytics
Predictive inventory management: Keeping your supply chain in balance
2
Predictive inventory management: Keeping your supply chain in balance
Contents
2 Introduction 2 Keeping shelves full, but not too full – Cost containment – Risk is everybody’s business – You can’t sell what you don’t have 4 How predictive analytics aid inventory management 5 Inventory and demand forecasting – Assortment planning and market basket analysis 9 The inner workings of predictive analytics 11 Conclusion
Introduction
A lean, efficient supply chain is an important goal for virtually any business involved in manufacturing, distribution or retail. In recent decades, innovations such as just-in-time manufacturing, bar codes and RFID tags, to name just a few, have revolutionized inventory tracking and the entire process of inventory management. Along with these innovations has come a dramatic increase in the quantity of information about inventory. The result is that today, one of the most basic and necessary capabilities of an effective inventory management system is that of coping with the sheer volume and diversity of data involved. This white paper outlines some of the major factors affecting inventory and supply chain management, and covers practices and capabilities that distinguish the most successful approaches to this complex process. It highlights some of the factors you should consider as you evaluate the maturity of your own supply chain and inventory management processes. It also identifies incremental improvements that can enable you to cost-effectively upgrade your inventory management system, one step at a time.
Keeping shelves full, but not too full
Inventory management is one of the most important operational activities that determine the success or failure of any business. Whether it’s a neighborhood bakery keeping enough doughnuts on hand for a construction crew working nearby or a
Predictive Analytics
Predictive inventory management: Keeping your supply chain in balance
2
Predictive inventory management: Keeping your supply chain in balance
Contents
2 Introduction 2 Keeping shelves full, but not too full – Cost containment – Risk is everybody’s business – You can’t sell what you don’t have 4 How predictive analytics aid inventory management 5 Inventory and demand forecasting – Assortment planning and market basket analysis 9 The inner workings of predictive analytics 11 Conclusion
Introduction
A lean, efficient supply chain is an important goal for virtually any business involved in manufacturing, distribution or retail. In recent decades, innovations such as just-in-time manufacturing, bar codes and RFID tags, to name just a few, have revolutionized inventory tracking and the entire process of inventory management. Along with these innovations has come a dramatic increase in the quantity of information about inventory. The result is that today, one of the most basic and necessary capabilities of an effective inventory management system is that of coping with the sheer volume and diversity of data involved. This white paper outlines some of the major factors affecting inventory and supply chain management, and covers practices and capabilities that distinguish the most successful approaches to this complex process. It highlights some of the factors you should consider as you evaluate the maturity of your own supply chain and inventory management processes. It also identifies incremental improvements that can enable you to cost-effectively upgrade your inventory management system, one step at a time.
Keeping shelves full, but not too full
Inventory management is one of the most important operational activities that determine the success or failure of any business. Whether it’s a neighborhood bakery keeping enough doughnuts on hand for a construction crew working nearby or a