SkuBrain 101

What is SkuBrain?

SkuBrain is an inventory optimization tool. Its main purpose is to help you decide what stock to buy, which involves two basic steps:

  1. Forecasting demand
  2. Inventory planning

If you’ve ever sent a purchase order to a supplier then, implicitly, you’ve already done both of these things. However, SkuBrain adds some data science to this process and automates much of the work involved.

Forecasting Demand

The reason you hold stock is because you expect that customers will want to buy it. So before making any inventory planning decisions, you first need to establish some expectations about future demand for the products that you sell – a process that is commonly referred to as demand forecasting or demand planning (depending on who you talk to).

Inventory Planning

Having estimated what you expect to sell, you then need to plan what to buy and when so that you’ll have enough stock on hand to meet that forecasted demand. In industry speak, this process is usually called inventory planning or replenishment planning.

To plan what you need to buy, you’ll obviously need to take into account your demand forecasts. However you also need to consider various other things such as:

  • What stock you already have on hand
  • Lead times for acquiring goods from suppliers
  • How often you want to reorder stock
  • How much stock you want to keep in reserve in case sales exceed expectations