Adjust Inventory Faster for Demand and Supply Changes
Tiltmeter® automatically detects demand and supply changes faster than your ERP inventory software system.
The Problem With Slow Reactions to Big Changes in Sales
Optimal inventory levels rely on accurate and up-to-date forecasts and lead times, but most ERP inventory software systems take at least six months to properly adjust inventory to account for significant changes in demand and supply.
Those six months are a major cause of lost sales and excess stock.
For example, our research shows that an average of 70% of wholesaler SKUs sell to just one or two customers. If you lose that customer, your ERP system continues to buy, causing excess stock.
On the other hand, if your customer activity increases significantly for a SKU, your ERP system reacts too slowly, not buying enough, which causes stockouts.
How Tiltmeter Demand Helps
Tiltmeter Demand connects directly to your existing ERP inventory system, alerting buyers to changes in demand in as few as 30 days. A third-party supply chain planning software takes six months on average to recognize substantial change.
With the alert, buyers are able to act quicker to buy more items before they stock out and fewer items that customers are no longer interested in buying.
This allows wholesale distributors to maximize their sales and minimize excess stock.
Keeping Your Lead Times Up to Date is Critical
Your actual vendor lead times change constantly. ERP purchasing systems rely on a lead time for all of your inventory decisions.
For example, if your ERP purchasing system assumes that you will get one of your "A-ranked" products within seven days, but your vendor ships it in 30 days, you are most likely going to stockout of that item.
On the other hand, let's say that one of your vendors has been shipping in 60 days for the last few months. In your ERP, you've set your lead time to 60 days to account for that. Now the vendor is back to their normal 30 days, so you're going to buy too much inventory until that lead time is adjusted back.
How Tiltmeter Supply Helps
Tiltmeter Supply analyzes all of your open purchase orders and their receipt dates, as well as the planned lead times in your ERP purchasing system.
Tiltmeter Supply identifies big differences between your actual versus ERP lead times and will then alert your buyers. Once validated, Tiltmeter Supply can overwrite the validated lead time in your ERP.
This, too, maximizes your sales and minimizes excess stock.
Optimizing Sales and Operations Planning for North America’s Most Recognized Wholesalers
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Curious if the speed of demand and supply changes are an issue for your inventory?
Reduce Your Dead Stock With Thermostock®
Thermostock automatically identifies and optimizes low-volume SKUs, allowing buyers to focus on the forecastable A and B items and reduce their dead stock caused by low-selling SKUs.
Your Questions, In Focus
Does Tiltmeter do sales and operations planning?
Sales and operations planning is hard to do, especially for wholesalers. That's because wholesalers have tens to hundreds of thousands of SKUs they manage. What makes sales and operations planning successful is the efficient communication between sales and operations teams about forecast changes. When you’re managing this many SKUs in multiple locations, effective S&OP is difficult.
We simplified S&OP with our patent-pending inventory optimization technology, Tiltmeter. It alerts buyers and branch managers of any changes in your data every month. When a change is detected, it asks the branch manager for their response to the question, “Did we lose this account?” They enter their response and then it goes to the buyer to adjust the forecast for its new accuracy. It’s the benefit of sales and operations planning without all the work.
What happens to our inventory performance if we lose a large customer but don’t know it?
Large and unexpected changes in customer demand are a primary driver of dead stock accumulation and stockouts for wholesale distributors. Most ERP systems are incapable of quickly detecting these changes, leaving purchasing teams unaware of escalating inventory changes and forcing them to react instead of being out in front of it. ERP forecasts typically take up to six months to fully react to significant demand changes, dramatically slowing your responsiveness in adjusting inventory levels. Tiltmeter reduces the time it takes to react to change to curb this from affecting your business.
What inventory performance KPIs are affected by customer losses?
When demand plummets due to the loss of a large customer while your purchasing system continues to place orders, your excess inventory will escalate, inventory turns will drop, and the excess inventory eventually becomes dead stock. This can be prevented by an early-warning system, like Tiltmeter, to alert your teams as soon as demand shifts. Buyers can halt purchases and sellers can begin small-scale discounting to eliminate the remaining stock without hurting your bottom line.