Forecasting, Inventory Management and Planning

 We consider these topics as one of the most important parts of Supply Chain Management. Companies tend to regard inventory as purely Capital Employed and as such a (relatively high) cost factor. We, however, adopted a deviating theory on this subject, namely ‘the right inventory level at the right moment as a valuable asset, in order to meet customer expectations and to optimize cost-efficient production’.

Since businesses basically are quite different, a tailored approach is to be followed.
First step is to put product portfolio through a profound analysis, because many aspects have their impact on  finance, customer expectation and satisfaction, risk management, cost reduction and operational efficiency.

Click here for some Criteria for Item Analysis.

Based on the analysis results, we will propose decisions on inventory management tactics, in line with the company and its product line strategies, e.g.:

  1. Make to stock
  2. Make to order (under particular conditions)
  3. Engineer to order


In multi-level logistical operations it is evident, that potential stock policies for each level are to be defined. Some of these tactics and strategies may impact on pricing, sales and marketing.

Second step will be to go through an in-depth analysis of the forecasting process. Aspects to decide on are:

  1.    Decentralized or centralized
  2.    Top-to-bottom or bottom-to-top
  3.    History or market/marketing driven (or a combination)
  4.    Forecast accuracy measurement processes


These models will be extended by Inventory Management parameters, such as Order Frequency/Quantity calculations, Safety Stocks (per level), Order triggering etc.

Finally we will set up an S&OP process (Sales & Operations Planning), although it is preferred to apply the abbreviation SIOP, where the ‘I’ stands for Inventory. Inventory should be considered as a buffer stock enabling Sales and Operations to be optimized separately, at the same time taking into account the financial impact.

Planning will also permanently check and coordinate with Customer Service, Purchasing, Warehousing and Transport.

NB. We have built up vast expertise  and experience in Forecasting, Inventory Management and Planning. Consequently we consider ourselves as experts in these domains and it will be our pleasure to personally discuss and visualize our views, in order to gear our views to your company’s requirements.