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Capture more sales with automated safety stock processes

Written by
Jul 24, 2023
10:04 am
minute read

Are you tired of dealing with supply chain disruptions and unexpected spikes in customer demand? Do you want to ensure your business runs smoothly without worrying about inventory management? 

An automated safety stock ordering process might be the solution you need. 

With the right setup, you can easily stay ahead of the game and capture more sales. This blog post explains why an automated safety stock process is essential for your warehouse operations.

What is safety stock?

First, let's understand what safety stock is. Safety stock is extra inventory kept on hand to protect against demand variability and supply chain disruptions. For example, if you have a product that sells well during the holiday season, you may want to hold extra inventory in case of unexpected spikes in demand. 

An automated safety stock ordering process can help you manage this inventory effortlessly. You can set up a system that will automatically order more stock as soon as your safety stock levels get low. This way, you never run out of stock and never miss out on sales opportunities.

What are the benefits of automating your safety stocking ordering processes?

Never run out of stock. Never miss out on sales. Automating your safety stock ordering processes can boost your company’s revenue and please more customers. Here are the top benefits of automating your safety stocking ordering processes:

  1. Automated safety stock ordering processes can save you time and money. An automated system can do the job for you rather than manually checking inventory levels and placing orders. This will free up time for other important tasks and reduce the risk of human error. An automated system can also help you avoid overstocking, which can tie up your cash flow and lead to unnecessary storage costs.
  1. Automated safety stock ordering processes can provide you with more reliable insights on when to buy what products and how much. With a carefully managed safety stock system in place, you can better understand your customers' demand patterns. This, in turn, can help you make informed decisions about your inventory needs, optimize your supply chain, and improve your overall inventory management strategy.
  1. Automated safety stock ordering processes can help you avoid stockouts. A stockout is when you run out of stock and cannot fulfill customer orders. This can lead to lost sales and damage to your brand reputation. With an automated system, you can ensure you always have enough inventory to meet demand and never run out of stock.
  1. Automated safety stock ordering processes can help you improve your customer service. You can fulfill orders quickly and efficiently when you have inventory on hand. Your customers will receive their orders on time, and you'll be able to provide a better overall shopping experience. This, in turn, can lead to repeat business, referrals and positive reviews.

When do you need to automate your safety stock ordering processes?

Are you running out of product without warning? It’s time to automate your safety stock ordering processes. Let's walk through an example and a solution to your problem.

As you know, maintaining adequate inventory levels is paramount to a company’s business. After all, a company must have products in stock to secure a sale and keep customers happy. 

Safety stock was a challenge for ABC Distribution, an ecommerce company specializing in seasonal items. They were missing out on sales because items were constantly out of stock.

Because ABC sells seasonal products, the demand for their products constantly changes, making it even harder to estimate product velocity and accurately predict inventory levels. ABC’s business conditions and customer demands constantly change, and their employees could not adequately recalculate safety stock to meet customer demand.

ABC Distribution is missing out on sales because they can’t keep high velocity in stock. ABC’s team has enough to focus on. Their team fights fires and tries to get orders shipped that day. On top of that, their employees were manually calculating their safety stock calculations on top of their other duties, so performing safety stock calculations — a tedious process — was often pushed and rarely done. 

How PorterLogic solves this problem 

With PorterLogic, ABC can automate its entire inventory safety stock process, including sending purchase orders for items running low. Calculating safety stock levels is a tedious process influenced by several factors, including item velocity and demand changes. 

Because ABC Distribution sells seasonal items, customer demand and product velocity vary throughout the year. With PorterLogic, calculating inventory safety stock happens automatically, accurately and in one system.

ABC’s inventory management system (WMS) is separate from its purchase order system (PO system) and order management system (OMS). PorterLogic integrates with ABC's OMS to pull weekly customer demand data from all channels, including determining item velocity before then

connecting to their PO system to calculate lead times for purchase orders based on submitted and received dates. PorterLogic uses these inputs to calculate safety stock levels each time.

Then, PorterLogic goes to the WMS to look at inventory levels. ABC needs to reorder the item if inventory levels exceed the calculated safety stock. PorterLogic automatically creates purchase orders for any items that need additional ordering, allowing ABC's team to focus on other value-add tasks.

PorterLogic then also has a set of screens that shows ABC what’s happening at all points of the process — including records of calculations and reorder points — so that ABC can see what’s happening with the calculation to audit and adjust as needed.

This is a solution that sticks. PorterLogic updates reorder points in ABC’s PO system based on these new safety stock numbers and automatically creates PO orders based on those new numbers. ABC will continue to maintain adequate inventory levels in all seasons, meeting customer demands and increasing sales.

Want to optimize your safety stock processes? 

An automated safety stock ordering process can help you stay ahead of the game and easily capture more sales. It can save you time and money, provide you with more reliable insights, help you avoid stockouts and improve your customer service. So, if you're looking for a way to optimize your inventory management strategy, consider implementing an automated safety stock process. Your business will thank you for it!

Curious to learn more about how PorterLogic can solve your safety stock challenges? Contact our team today

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