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How To Harmonize Inventory Supply and Demand 

   
2019-02-28 
One way to maximize your business profitability is by keeping your inventory under control. The only way to do this effectively is by understanding the supply and demand of your products under control. 

 If either of these elements gets out of balance, then you aren't making the money you could be by spending resources on trying to rebalance. If your business runs an excess of supply, then it is going to have lots of inventory on hand which is very costly overhead to maintain. The purpose of inventory is to sell it, so having an inventory turnover rate that is less than 12 is inefficient for most companies. On the other hand, not having enough inventory is just as critical to a company.

Inventory shortage affects the company more than just by the numbers. Aside from not earning revenues that are in demand, the company is making a statement to the customers that they can not give them the products that they desire which could cost them future customers and further revenues than they are already missing out on. 

So in order to prevent these losses from happening, follow these steps using ERP to keep that supply and demand in check.

Track business trends: Most likely, your product is susceptible to the business cycle and you will have slow and fast periods. By using an ERP system, you can keep track of when business is slow and when it picks up. These historical trends will give you a good picture of when to adjust your buying schedule. 

By: Cameron Sordahl 

TEKOA ERP Software 

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