Now that you have read an overview of Thrive's four disciplines for optimal inventory performance, and have hopefully read our in depth article about Alignment, we would like to go over the second of the four disciples- Precision.
Thrive’s system typically provides an aggregate forecast accuracy of over 90% – resulting in a much more precise and profitable mix of inventory than other solutions.
Improving your forecast accuracy to better estimate projected sales by item / warehouse is the BEST way to improve inventory performance for distribution companies.
HOW IT WORKS
Once you have set your company's goals in Alignment, the Thrive system has a precise idea of what your specific inventory goals are. Then, the system starts working towards those goals. In order to achieve the precision part of our system, it provides a Forecast Accuracy Report as well as Error Metrics in the application. By doing this, we are measuring and providing that feedback loop so that we know when things go off track and if and when they need to be adjusted. This is precision - we make sure our system is always driving towards your inventory goals, even if things within your inventory changes. For example, a product category can take off and start to drop in forecast accuracy. It alerts the users to adjust some settings to make it more reactive to latest demand and allow the forecast to get higher faster. Otherwise you would end up underbuying for that hot category.
Below is an example of the SKU forecast page. This is a snapshot of a page dedicated to a single SKU's forecast analysis. You can see the page shows the SKU's statistical metrics, accuracy metrics, and current item status.
In the table above, is the Thrive vs ERP Forecast Accuracy report. Here, you can see how much more accurate Thrive's system is in regards to accurately forecasting inventory - compared to the traditional ERP system.
To learn more about inventory forecasting optimization, visit our site at www.thrivetech.com