Many companies say that they want to Optimize Inventory, but they often have different things in mind when they say it.
Thanks to Covid-19 almost every supply chain is being re-examined to become more resilient. But there is only so much you can do! There are external factors over which you have no control such as demand changes, up or down, tariffs or dock worker strikes!
Traditional demand planning techniques rely on past data in order to forecast the future. They can also use event data that occurred at a certain point in the past in order to project the impact of that event happening again in the future.
Inventory is just an accumulation of costs, until it gets sold and moved out to a customer. So, the basic issue is how to make inventory move or as they say “turn.” Lack of inventory at the right time means loss of revenue and potentially loss of market share.