Balancing Inventory and Profit
The overall objective of an inventory management system is to optimize each and every replenishment buy while ensuring the decisions made are consistently aligned with your service and profit goals. State-of-the-art purchasing systems, like HIMPACT, take this one step further.
How HIMPACT® Optimizes Your Profit
HIMPACT profitably balances inventory and customer service by combining factors from:
Lead Time Forecasting
Vendor Order Cycle
Our goal is to identify the right inventory levels for every location and SKU, all while providing you with the highest level of customer service and minimizing your inventory investment.
HIMPACT® analyzes demand patterns, vendor economies of scale, and delivery performance along with your customer service goals to generate replenishment orders. The system dynamically adjusts to changes in consumer demand and vendor performance to keep your inventory at the customer service target specified day-in and day-out.
Before a PO is ever created, HIMPACT® analyzes and incorporates any and all vendor and item discount brackets, vendor deals, and future promotions. Daily, the system builds orders up to a full truck, or several trucks, or simply up to the vendor’s order minimum.
HIMPACT® also helps you know more, by reliably balancing the relationship between inventory and customer service. It delivers the targeted customer service you need while optimizing profits down to the most granular levels.
HIMPACT® Analyzes What is Most Profitable
By balancing the cost of carrying your inventory against the cost of ordering/handling it, we can find the most profitable replenishment orders. HIMPACT® also recommends the most profitable customer service goal by location/SKU.
The solution dynamically balances the cost of lost sales vs the carrying costs of inventory. Statistically, we have identified the inventory levels required to provide 92%, 95% or even 99.5% customer service.
Our unique bottoms-up approach to planning allows Retailers and Wholesalers to set service goals at their most profitable levels. For example, an item may be most profitable at 99.5 percent at some locations but 95% or 98% at others. HIMPACT® provides the ability to see your service level performance compared to your goal on a daily basis, and make adjustments as needed. These new service goals are then what drive the replenishment orders going forward
All the Tools You Need at the Click of a Mouse
All of this is possible with just one mouse click. HIMPACT® gives you the tools to tailor your supply chain strategy to each channel and segment of your business.
Rather than assign the same “one size fits all” service level target to all SKUs in a group, Service Level Optimization in HIMPACT® assigns different service targets to each individual Location/SKU, further driving inventory savings while still achieving the same overall service level mix.