NetStock: Optimising Stock Levels
When it comes to minimising costs and risks, for any company that holds stock it is also essential to maintain an optimal stock level.
What is the stock level?
The stock level is the quantity of products stored and available for sale in the organisation’s warehouses.
The stock level can be measured both in the number of items and in the cost value of that quantity, with the latter being the most commonly used measure.
When optimising a company’s stock, it is important to follow a mathematical model that, based for example on previous consumption, is able to calculate what the optimal stock level would be.
It is important to bear in mind that it is not enough to reduce the products we have stored at random; it must be done properly in order to always maintain minimum safety levels and thus avoid stockouts.
As a preliminary phase prior to stock optimisation, LISDATA develops the capture and processing of stock-related information using the data mining tool Knime.
Once the required data have been processed and transformed, they are sent to the cloud-computing-based tool: NetStock.
NetStock is able to predict optimal stock levels and shows us the current status of each of our warehouses.
Let us look in more detail at each of the phases we follow:
ETL process with Knime.
First, we create a workflow in Knime to carry out the ETL (“Extract, Transform and Load”) phase, where we will process the data and prepare the files required for NetStock to perform its subsequent calculations.
In this first step, we read the data from the sources involved and create all the necessary tables in order to feed NetStock with data.
Once this step has been completed, the data are processed by NetStock. At this point, we obtain a graphical interface that shows the main KPIs (“Key Performance Indicators”). See Image 2.
For example, in Stock holding we can see the current value of our stock in the warehouse, which would be 34 million, while the optimal stock would be 10.3 million. Just below, we can see the top five SKUs with the greatest excess stock. In addition, we can see other indicators, for example, potential stockouts and the five products at greatest risk of running out of stock.
Therefore, with accurate and thorough data extraction and proper processing, we can obtain indicators that reflect the current situation of our warehouses in terms of stock and, at the same time, have a model that optimises our stock levels, thereby reducing the risk of stockouts and minimising the idle capital we will have tied up in our warehouse.
NetStock: Consumption forecasting
On the other hand, it is worth noting that NetStock does not stop at this rather superficial part; it also shows the information for each SKU as well as a future forecast of its consumption:
Therefore, we are looking at a very complete and complex tool, yet at the same time easy to understand and use, so that with a single click we have a summary of past consumption and inventory levels together with the most important KPIs, and we also have a forecast of future sales. As a result, we are looking at one of the best tools on the market for graphically representing the status of warehouses and optimising our stock levels.