IBM Offers Inventory-Reducing Analytics For Retailers
The IBM Dynamic Inventory Optimization Solution mines data for customer order patterns and then applies patented algorithms to project stock overages and shortages, officials with the Armonk, N.Y., company said. The product also evaluates retailer and vendor sourcing rules, and suggests orders and replenishments.
Retailers traditionally prepare weekly forecasts using point-of-sales data. By providing daily forecasts, the new software can help retailers cut inventory levels by as much as 40 percent, IBM said.
IBM recently deployed the product at Max Bahr, a German do-it-yourself retailer with 90 stories. The retailer had used local planners in its stores to manually forecast inventory needs for more than 70,000 items.
The new product, which was implemented by IBM Global Business Services, automatically generates daily order proposals and forecasts for each Bahr store, based on an analysis of 15 million to 20 million POS transactions, IBM said.
In a joint statement with IBM, Anja Schoning, project manager for Max Bahr, said the inventory-optimization software had significantly reduced the probability of items being out of stock.
The Dynamic Inventory Optimization Solution, which was developed by IBM Research Labs in Zurich, Switzerland, can be integrated with a company's business operations, IBM said. It works in conjunction with enterprise resource planning systems as an add-on planning component, and also operates in a non-ERP environment as a fully integrated replenishment system.
The new software is currently available. Pricing was not disclosed.