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The ultimate goal of every company is to generate profits by selling products at the best possible margin. For most businesses, this means selling the largest volumes, at the right price, through the appropriate channels. However, as competition increases and external factors like trade wars and pandemics start playing a role in the economy, it is no longer sustainable to solely focus on sales to generate profit. Put simply, companies can no longer afford to ignore the cost perspective of the business.

As the trend towards digitalisation becomes more mainstream, advanced technology is becoming more accessible than ever before. As a result, businesses are presented with a host of new tools and technologies that can be utilised to minimise supply chain costs.

Simplistic data processing tools

To run a successful business it is vital that the inventory is managed carefully. Even seemingly small inventory management decisions can have a profound and far-reaching impact across the rest of the organisation. For a company to succeed, the inventory strategy must align with the overall corporate vision of the organisation.

Surprisingly, companies are highly reliant on simplistic data processing tools to manage their inventory. The inefficiency of ordering with a simple spreadsheet is costing money through excess and obsolete inventory, missed sales, and wasted time. All of these can cause problems to the bottom line which directly affects profit and loss.

In our field, Excel spreadsheets are often the default tool for every bit of analysis required. However, trying to manage inventory this way can quickly become a complex and long-winded exercise. In a situation where demand or supply can quickly change or where transfers between locations need to be suggested based on certain business rules, an Excel sheet will not be sufficiently responsive to support these processes. After all, how can company processes remain sustainable if the spreadsheets in question have to be partially re-invented every time a change occurs?

Furthermore, a spreadsheet is only as accurate as of the person who created it. What happens when this person changes roles or leaves the company? Will their replacement be able to decipher the cryptic formulas which have been developed over the years? The reality of Excel spreadsheets is that every sheet becomes bespoke and companies become dependent on whoever created the document. Besides that, wouldn’t it be nice if the business can capture the knowledge of its talented employees and integrate that into the inventory processes? Invest in an Inventory Management Solution

Inventory management is a key topic for every company. And given the high impact on the financial results, it deserves to be managed properly. Therefore, choosing to use a state-of-the-art inventory optimisation solution means equipping the company with the right tools required to increase profits.

Selecting a solution that will work with, and enhance, any ERP system to improve customer service level, eliminate excess inventory, optimise safety stock, and improve net-profitability.

The tool must be able to analyse inventory from a strategical level, to a tactical level and through to an executional level, to identify inefficiencies that are not aligned with the objectives of the company. It must be possible to set KPIs at the strategical level and the inventory management solution should make sure these goals can be easily translated to achieve the right inventory on the right shelves at the right time.

Taking into account advanced algebra and science, the solution will automate the nearly impossible task of managing hundreds, thousands, or even millions of items across multiple warehouses simultaneously. It considers demand volatility, seasonality, trends, product life-cycles, supply and demand uncertainty, logistics constraints, product introductions, inventory transitions, promotional strategies, and excess, before calculating the right amount of inventory and safety stock required to meet the customers expectations.

Regardless of changes in personnel, a solution can support company continuity by capturing and maintaining knowledge from employees. Thus, it provides for a robust and standardised process. Preferably a workflow-driven platform that automatically gives notifications when an item needs extra attention. From visual perspective also equipped with a customised reporting dashboard to give up-to-date insights on key metrics.

Partner with a trusted vendor

Investing in new software can be a huge leap of faith for some companies. There are some known risks associated with purchasing and implementing software such as overpromising functionalities and underestimating implementation times and costs. Hence, choosing a vendor you can trust matters.

Reviewing a testimonial or directly hearing from existing customers in similar business is a good way to validate the claims of the vendor. The first-hand experience and proven results will give more confidence in the capabilities of the solution and the ease of use, as well as the expertise of the vendor and willingness to support during and especially after the implementation.

Although advancing technology has helped make remote access to networks less cumbersome, the benefits of working with a local vendor remain as important as ever for project teams. The greatest value of a local vendor is the face-to-face personalised attention that can be provided. Topic-experts can come to the office and even peak in the warehouse and spend as much time as it takes to learn about the requirements of the business, evaluate the existing resources and take planned next steps to ensure the success of the implementation.

Consider Return of Investment

When assessing whether or not to invest in a solution, it can be tempting to focus on the total cost of ownership (TCO). However, the TCO will analyse the cost perspective of the investment. When investing in solutions to optimise inventory, the emphasis should be more on benefits. After all, that is the main reason to digitalise the business.

Return on investment (ROI) is, therefore, a better financial metric to utilise. This is because of ROI factors in potential value and expected return. For example ROI Factors in the long-term potential value of translating the strategy of the organisation into more effective operational decisions. Furthermore, ROI analysis can begin to quantify intangible benefits such as capturing and maintaining knowledge within the company.


With the ability to reduce cost and that way increase profit, digitalisation is the answer to many inventory management pain points.

By supporting the current supply chain processes and strategy, a good inventory management solution will invariably heighten efficiency and makes life easier for everyone involved in the company. The right solution will make it easily possible to strike the right balance between working capital, operational costs and the optimal service level to customers, which will ultimately result in more profitable business.


Author:  Erik de Witte, Operations Director South East Asia, Slimstock Asia Pacific Pte. Ltd.
Brief Bio:
As operations director of Slimstock South East Asia and with almost 10 years of experience in the business, Erik de Witte is familiar with different challenges in inventory optimisation. As he worked in Europe, North-America and the Asia Pacific he has experienced change management within supply chain management in all kinds of industries and from family-owned businesses to complex multinationals.

Slimstock: Having 26 years of experience, Slimstock has more than 300 experts in 21 offices globally. Specialised in Inventory Management Optimisation, Slimstock completes at least 100 implementations yearly within budget and time. With a high retention rate of 96%, Slimstock is confident that the return of an investment will be achieved within a year. Visit for more information on how Slim4 can strike a balance between working capital, operational costs, and the optimal service level.