Inventory forecasting software StockTrim is finishing
2020 having proven itself effective in a year which tested
supply chain resilience.
The dour year was reflected
in the Emerging Out of the Pandemic Supply Chain
report from Reuters and CalAmp. Published in July during
the peak of COVID-19 lockdowns, the report called demand
forecasting software “critical,” noted that Just In Time
lean inventories came at the cost of robust supply chain
management, and found costly consequences and supply chain
bottlenecks were occurring where businesses failed to match
siloed data between sales, operations and
inventory.
“If the pandemic has shown us one thing,
it is that those unwilling to embrace digital technologies
must rapidly change their outlook, before it is too late,”
report author Jeff Newman found.
Any wholesaler using
inventory forecasting software like StockTrim would have
found 2020 a lot easier.
By the time COVID hit, the
inventory optimisation software-as-a-service had been
available for three years, picking up followers
worldwide.
Integrating with stock management software
partners Cin7, Shopify, Unleashed, TradeGecko, Vend, MYOB
and Xero, StockTrim looks at past stock behaviour and future
demand to help wholesalers save money.
StockTrim was
designed by NZ software engineer Paul Simpson and launched
in 2017.
Simpson, who had worked for corporate IT
companies such as Datacom, realised there was a market
opportunity for a SaaS which would plug into inventory
management systems, meet lean manufacturing needs and solve
the problem of poor stock-buying decisions.
“Where I
worked, inventory planning was a manual process – people
were painstakingly bringing up sales reports or doing
guesswork,” Simpson says. “I thought it would be really
good if a system could use a machine learning algorithm to
read through the data, make sense and tell you what to
do.”
“Over time it learns the best factors that
predict demand for every individual business.”
Users
simply connect their inventory data, then StockTrim provides
analytics to save money and eliminate human error. The
result: Trial customers in a range of countries are
reporting savings of up to 40% of working
capital.
This is because customers told Simpson from
the get-go exactly how much stocking mistakes were costing
them. A survey of trial customers found $NZD 750000 p/a
average over-stocking for each business (working capital
which could otherwise be saved) and $NZD350000 p/a average
under-stocking (risk in missed sales – sum of margin for
each item).
Looking at the numbers, Dom Sutton was
convinced inventory forecasting SaaS had a bright future and
joined Paul as co-founder in October
2018.
Sutton had formerly owned an importing and
wholesaling business and learned first-hand how much Slow
and Obsolete inventory (SLOB Stock) can cost.
“I
lost $1.2m by not using a $4-a-day inventory planning
software,” Sutton says. “I bought a struggling toy
business that, on the surface, looked like it had a lot of
potential. But only two years later, I was forced to sell it
at a fraction of what I invested. There was stock sitting in
the warehouse that had zero chance of selling. I had to use
the business’s cash flow to pay for the junk stock and I
was forced to keep reordering products because we always had
to have new toys on the shelves.”
Sutton urges any
business sitting on stock in 2021 to run their numbers
through inventory forecasting software.
Simpson and
Sutton are today 50/50 partners. With sales increasing in
the US, UK and Australia, StockTrim spent 2020 completing a
capital raise and heads into 2021 with plans to scale up,
saving thousands for businesses
worldwide.
