Understanding the problem
A small distributor came to us in hope that we could create software to aid him in better managing his warehouse inventory. The traditional purchase process was tied directly to stock levels and even though the distributor included expiration dates into re-stocking calculations he felt that their ordering system was too much dependent on a purchasers gut feeling rather than on known quantifiable data.
Deconstructing problems to compartmentalize the potential solutions
After gaining a better understanding of the perceived shortcomings of the available ERP system the distributor relayed upon, we established that there were two core problems that had to be addressed. First, the ordering schedule had to be set in such a way that historical volume trends could be used as predictive measure, and second, there had to be a way in which a system could suggest the optimal purchase times based not only on inventory, but based on pricing and storage cost as well.
Low hanging fruit first
For the first module in the software packet the decision was made to create a two stage notification system in which an initial purchase notification is generated factoring in inventory predictions based on historical sales data compared against prior purchase cycle intervals. In addition, the system lets the distributor define critical stock levels for all inventory items which trigger warning notifications when reached. This became the pre-warning system that allowed the distributors purchasers look for the best options in between the two notification.
Unfortunately the current ERP system didn’t allow for direct data exchange or provide an API so we had to implement a manual update mechanism. In our effort to make all UX (user experience) as un-invasive as possible we created a data import mechanism in which the only manual step is for the warehouse manager to run a report on the current EPR system and post the result which the system uses to update itself.
We then created a module that automatically receives the soon-to-be purchased inventory item list from our notification system and compares prices from a pre-defined list of suppliers. While this solved the second problem of taking price into consideration as well, we went one step further and created an online portal in which the suppliers could notify us of special pricing opportunities for items they provide. The system automatically sends notifications for items that according to current inventory levels could benefit the distributor.