VERITICO STOCK

Keeping stock burdens trading companies, ties up capital and takes up warehouse space. However, full warehouses are essential for the Supply Chain. Without enough stock, differences in supply and demand cannot be covered, nor can you respond flexibly to customers’ demands. Whoever can deliver and sell the goods will ultimately win in the market.

There’s a fine line between keeping dead stock and a healthy inventory that supports your business goals, and striking that balance for every item is difficult. To manage your stock well, you not only need to correctly estimate the demand and monitor supplier reliability but must also order the right quantity of goods at the right time. This is difficult even with a few items, but what if you have tens of thousands, and you sell them through a network of hundreds of brick-and-mortar stores in addition to an e-shop?

With VERITICO STOCK, overwhelming calculations are a thing of the past. Just connect the software to your information systems and set up your business strategy. VERITICO STOCK does all the calculations of forecasts, standard deviations, quantiles and other statistics for you. Your buyers will then just receive order suggestions that reflect your business strategy, and you will clearly see how your inventory is working for you via reports. As a result and over time, your stock will decrease and availability will increase. You buy less, you earn more.

Demand Forecasting

Demand Forecasting is the basis for inventory management in any company. For our forecast, VERITICO STOCK uses a combination of statistical methods, machine learning and neural networks. The system intelligently selects from 80 statistical models to predict future demand (sales) for each specific item (SKU), always selecting only one perfectly suitable algorithm for that item.

Planning requires looking ahead, and a good forecast is therefore the basis for all other inventory management steps. VERITICO STOCK takes care of the automatic forecast for you, and all subsequent steps depend on an accurate forecast. Just like we cannot drive a car by looking in the rearview mirror, inventory planning is no different. The system’s monthly and daily sales forecasts allow you to adjust stock levels and orders to seasonal influences and properly plan holidays and promotions. Last but not least, the VERITICO system suggests orders so that the stock structure matches your customers’ future requirements. Your inventory decisions today are responsive to customer demand weeks and months from now. Being able to correctly calculate future sales is therefore an essential part of successful inventory management.

VERITICO STOCK forecasting models are highly automated. Most calculations and statistics are done using artificial intelligence and algorithms. No more manually calibrating models in Excel or setting parameters and wondering which method is the most appropriate. You can rely on VERITICO STOCK forecasting because its accuracy is among the world’s best.

VERITICO STOCK’s calculations are as transparent as possible, so you can always see why a particular forecasting method was chosen, down to the level of each individual SKU. Our customers prefer to focus on tracking market changes, competitor actions and other influences rather than diving deep into detailed numbers with Excel. Leave the hard work to the computer, and focus on the clients and the product.

Automatically selects the most suitable model
Handles sudden demand changes
Accounts for stockouts and predicts actual demand
Accounts for seasonality and the impact of fluctuating holidays
Accounts for the positive and negative impact of promotions

Main Features of
Demand Forecasting

In business, results count. Every day, the system tests all our models against historical sales and selects the model with the highest prediction accuracy for each SKU. VERITICO STOCK will do the complex calculations and hard work for you. This means you have more time to focus on other things: monitoring the market, taking care of your customers, or reviewing your competitors’ activities.

For models that work with historical time series, the data must be properly prepared. The software automatically identifies outlier sales, accounts for promotional effects, and checks for historical stockouts at points of sale. VERITICO STOCK automatically masks lost sales to predict actual demand based on your customer’s requirements, not just historical sales.

Some entries do not have sufficient datasets to create forecasts. In this case, the system is not completely helpless. VERITICO STOCK will estimate future demand behaviour using other means. For example, VERITICO STOCK can use the behaviour of a product category (here the system often identifies seasonality and trends) or choose from items that are a precursor to the item in question. As a result, VERITICO STOCK is also able to reliably predict sales in industries with short product life cycles, such as consumer electronics.

Easter can sneak up on us, but VERITICO STOCK can’t be fooled. The system is prepared for moving holidays and accounts for them in its calculations. For holidays in which buying behaviour is affected by the day of the week, it is possible to adjust the daily forecasts manually as your experience or judgment guides you. Alternatively, you can create rules to which the system will automatically adhere.

Our proprietary Fast-adapt technology reacts to sudden changes in sales that differ from our forecast. If VERITICO STOCK evaluates the change as significant and not as mere noise, it automatically switches to short-term forecasting to maximally adapt to the new customer behaviour. As a result, VERITICO STOCK customers did not suffer as much from high fluctuations in demand during the first COVID-19 lockdowns. The system adapted to the new situation and automatically switched to long-term forecasting mode once the purchasing change subsided.

Inventory Management

The perfect balance between the availability of goods and the cost of holding stock is the holy grail of Supply Chain management. Fortunately, it is possible to achieve high availability of critical products for important customers at reasonable warehouse sizes. But we need to determine each item’s importance.

VERITICO STOCK uses multi-factor segmentation for this purpose, based on the criteria you choose that best describe your business strategy. If you’re trying to gain market share, revenue carries more weight. If you are aiming for an ambitious profit, the system will favour high-margin products.

When determining how much stock you need to hold to cover all risks, the system accounts for target item availability, forecast errors, supplier reliability, and daily sales variability. For critical items, VERITICO STOCK adds a safety stock, while accepting the risk of stockouts for less important items. In this way, the software achieves the seemingly contradictory goal of reducing inventory and selling more.

Portfolio segmentation based on business strategy
Find out which products are your gold and which are holding back your business
ABC analysis based on the Pareto rule
Risk management capability over product segmentation

Main Features of
Inventory Management

Whether you’re in brick-and-mortar, e-commerce, retail or wholesale, you should know which products are key and profitable for you. The ABC of segmentation is a practical application of the Pareto rule – the theory that 20% of items account for 80% of sales. VERITICO STOCK divides the product portfolio into four basic categories (A, B, C, D) based on the performance of the individual items. For each of the segments, you can assign a specific availability rate for the items so that the key items of segment “A” have the highest possible availability (close to 100%), and the items in lower segments are only available to the extent that their transport and storage do not unnecessarily burden the logistics flow.

VERITICO STOCK uses the results of the ABC segmentation to set an essential parameter called Service Level. This is the value that determines the goods’ desired level of availability. The service level is the control parameter of the entire Supply Chain. A 100% availability level means that out of 100 customers who want to buy a product, 100 will be satisfied. Fifty per cent means every second customer goes home without the goods. You can set the Service Level in VERITICO STOCK by segment to different sales channels.

The Safety Stock level is designed to cover non-standard sales requirements and ensures that the set Service Level to the end customer is maintained. Ideally, sales will not rise above this value(i.e., the stock is held in addition to expected sales as insurance against unexpected fluctuations. This amount is calculated automatically, based on the degree of variability in sales, the magnitude of the prediction error, and the supplier’s error (in liability and delivery time).

Fresh meat, dairy products, fruit, vegetables and many other perishables have a short shelf life. Our solution takes expiration times into account so that you keep the optimum quantity in stock or in your store to be shipped, sold and consumed without exceeding the expiration date. This will reduce waste, improve margins, reduce losses and ensure the end consumer always receives fresh goods.

For complex distribution networks, it is important to ensure goods are optimally distributed among the warehouses and distribution centres. VERITICO STOCK works with the topology to design the optimal inventory for each node in the network. You decide whether to reduce inventory and concentrate it in a central warehouse, or you choose a decentralized strategy to ensure a high service level for your customers.

Replenishment

You’ll know you’ve done the previous steps correctly when you begin the preparation of orders, actual ordering, and reordering. Replenishment is the moment when math meets reality. Our order proposals are based on your forecast and your strategy. VERITICO STOCK accounts for each item’s different needs and tailors target inventory to meet your strategic goals like increasing margins, growing sales, or achieving unsurpassed customer service. Computers can calculate just about anything. But it’s the moment an order is placed that the real change in inventory management happens.

The system accounts for the customer side but also ensures supply is seamless, without unnecessary peaks in stock and transport. The system must account for a large number of real-world rules and constraints, including minimum order quantities, quantity discounts, supplier limits and complicated delivery schedules, or insufficient capacity in your central warehouse. VERITICO STOCK accounts for all these variables because it can see into the future. Thanks to the forecast feature, it can even calculate order proposals several months in advance. As a result, VERITICO STOCK can combine or split orders and move them back in time if there is a strong operational reason to do so. In this way, the system achieves high logistics efficiency and the system data is often used for complex negotiations with suppliers.

You will no longer have to think about shifting orders, and whether to buy from a supplier or reload. Sit back and review and confirm our suggestions in clear reports. This typically saves 50% of the time spent preparing purchase orders or reordering.

Preparation of optimal orders
Takes into account logistics constraints such as MOQ or MOV
Automation of orders into company processes

Main Features of
Replenishment

Based on the forecast and safety stock, VERITICO STOCK calculates order proposals for individual suppliers and stock items. It accounts for lead times, regular ordering requirements, and supplier calendars and designs orders to respect packaging and supplier limits. It clearly displays draft orders so you can make adjustments before the final order is sent to your ERP system or directly to the supplier via EDI.

You can work with the orders in a clear interface, add additional products, edit the quantity to be ordered, and split or merge orders.

Optimal supply plans face the reality of practical logistics constraints. Whether it’s warehouse and sales floor capacity, cashflow levels or the ability to choose a limited number of order lines, or imbalances in daily volumes that make life difficult for your warehouse manager. VERITICO STOCK considers these constraints in order proposals because it is future-facing and works with future supply requirements to propose splits or merge orders in a timely manner. In this way, you can meet demand despite real-world constraints.

Even with the best available technology, goods can end up on the shop floor with no prospect of being sold. At the same time, VERITICO STOCK predicts future demand at another store and identical goods are missing.

VERITICO STOCK deals with such situations and suggests restocking (internal transfer). Of course, the proposal accounts for possible logistics costs, legislative issues, and other constraints so the transfers are efficient.

In case of insufficient stock at the central warehouse or at the supplier, it is necessary to ensure a fair distribution of branches by using our fair-share algorithms. These algorithms ensure that at least a proportion of the needed demand is met. You can set the allocation rules, therefore it is up to you whether you prefer selected sales channels or store formats.

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