Anticipatory Inventory Management
If your business produces or sells goods, you know that it’s crucial to make sure your inventory includes enough stock to meet demand at any given time. For many businesses, anticipation inventory is an effective way to meet this need.
What Is Anticipation Inventory?
Anticipatory inventory management is the practice of procuring excess inventory to prepare for potential fluctuations in future demand. Let’s say you manage a business that sells ice cream. Demand isn’t very high during the winter, but in the spring, you’ll want to ramp up production to prepare for business during the summer.
Seasonal demand is a significant part of anticipation inventory, but there’s more to it than that. Planning for fluctuations year-round can help your business stay ahead of the curve and set you up for success in the long term.
How Anticipation Inventory Management Can Save You Money in the Long Run
Making sure you have additional inventory stocked puts your business in a position for immediate and long-term financial success. It’s hard to build brand loyalty when your customers are let down by out-of-stock notifications for the items they want. Anticipation inventory lets your business stay ahead of the demand and keep customers happy. In turn, these customers are more likely to return to your company.
Anticipation inventory can also be helpful when your business expects an increase in the price of products or necessary materials for production. The same goes for anticipated shortages of products. A bulk purchase in the short term can result in long-term benefits for your company.
Understanding the Need for Anticipation Inventory
Anticipatory inventory management can have a wealth of benefits for your business. When you anticipate inventory levels effectively, you can:
- Meet demands better: Understanding seasonal and cyclical trends can help your business go above and beyond to meet the needs of your customers. By making sure you have extra inventory in stock, you’re putting your business in a position for success.
- Make the most of consumer hype: In addition to using past data, you should look at current trends and stock up on inventory accordingly. Focusing on anticipatory inventory management helps your business keep a pulse on customers’ shopping habits at any given time.
- Stay ahead of the competition: In some cases, you may stock up on materials ahead of an anticipated spike in prices. Making sure you have additional inventory in stock can help you offer lower prices to customers — which means they’re more likely to turn to you rather than competitors.
Consumer demand can be unpredictable at times. Anticipation inventory gives your business the cushion you need to manage uncertainty to the best of your ability. Want to see acticipation inventory in action? Schedule a demo with our team.
How to Monitor Inventory Levels
Keeping track of your inventory levels is essential if you want to determine and manage demand effectively. However, it can be challenging to find a balance without over-stocking. Forecasting sales using data from previous years is an effective way to anticipate the inventory levels you’ll need from month to month. While anticipation inventory is not an exact science, using inventory management software can be a helpful practice when it comes to keeping additional inventory stocked.
How Finale Inventory Can Help
At Finale Inventory, we support growing e-commerce businesses with our scalable, lightning fast and highly adaptable inventory management system. We also offer world-class service and work to exceed expectations with our personalized approach. Contact us to learn more or sign up for a free trial to see our software in action.