Cloud-Based Stock Optimization Solution Integrates With IBM i
April 11, 2022 Alex Woodie
Since COVID-19 struck two years ago, we have seemingly jumped from one supply chain problem to another. First, it was toilet paper and cleaning supplies that were flying off the shelves, then it was shortages of anything with a microchip. The shortage du jour: baby formula. Now a Georgia company called Thrive Technologies is using machine learning technology to help distributors stay on top of supply chain disruptions.
Thrive Technologies has been developing inventory planning solutions since it was founded in 2001 by CEO Rick Morris. The company says it picks up the inventory slack where ERP solutions typically leave off. Armed with data from the ERP system, such as SKU numbers, item descriptions, and unit attributes such as cost, price, and weight, Thrive’s solutions are able to glean insight into the supply and demand of individual SKUs at the location level.
Its latest solution, dubbed Enlighten, was launched in February with the goal of giving distributors even greater insight into their operations. The cloud-based offering uses machine learning techniques to identify the specific causes of inventory issues buried amidst millions of rows of data in customers systems. Specifically, Enlighten searches for the causes of lost sales and “dead stock,” which customers can then go and fix.
“There are two primary inventory issues that every distributor wants to improve, but until now haven’t had a good understanding of the underlying causes – lost sales due to out-of-stock product and stock that doesn’t sell,” Morris says in a press release. “Enlighten helps distributors discover the root causes of lost sales and dead stock, so they can take action and reclaim the profit they’ve been losing as a result of these complex inventory issues.”
The typical distributor loses five to 10 percent of their annual revenue due to not having the right product in the right place when the client wants to buy it, Thrive says. “For a $100 million distributor, that means a revenue loss of $5 million to $10 million annually,” it says.
What’s more, distributors typically don’t sell 7 percent to 20 percent of their stock, the company says. When distributors have to liquidate that dead stock, they lose millions of dollars more. Thrive says Enlighten helps spotlight the underlying causes of both lost sales and dead stock, boosting sales by 5 percent and preventing up to 90 percent of dead stock.
Running in AWS, Enlighten provides users with dashboards where they can explore their inventory and drill down into specific products to determine if there are sales or stocking irregularities. There causes of specific stockout and dead stock situations vary, so some exploration is typically needed, Morris says.
“Distributors in this COVID-disrupted supply chain environment are seeing stockouts due to suppliers taking longer with deliveries or having a limited supply,” Morris says. “However, another cause for their stockouts might actually be buyers waiting for the suggested order to be at or above the vendor minimum for free freight. Enlighten can help identify the actual cause of stockouts, allowing distributors to focus on the real issue and make more informed decisions.”
Like all of Thrive’s offerings, Enlighten integrates with ERP software running on IBM i and other platforms. The company says it has experience with vendor-based ERP systems, such as JD Edwards, as well as homegrown systems. For more information, see the vendor’s website at www.thrivetech.com.