Getting started with inventory forecasting

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Testing and going into production with Lokad does not require upfront payments. For small companies, our Express plan is free and without limitation in time, and for others, we offer 30 days of free trial. Getting started with Lokad is a lightweight process, typically done in less than 1 hour when Lokad offers native support for the application that contains your business' historical data. In this page, we outline how to get started with the inventory forecasting process driven by Lokad.

Lokad can be much more than just a software, we also provide an end-to-end inventory optimization service where we take a full hands-on approach to delivering the inventory performance sought by your company. Learn more.

What does Lokad deliver?

Lokad computes probabilistic demand forecasts based on your company's historical data. These forecasts are unlike classic forecasts (per day, week or month), but our experience indicates that probabilistic forecasts are simply better whenever inventory optimization is involved.

By combining probabilistic forecasts with the relevant business drivers, such as the cost of inventory and cost of stock-outs, these forecasts can be turned into reorder quantities and much more. In fact, Lokad is a platform geared towards the quantitative optimization of your supply chain requirements. The final output can be as simple as an Excel sheet containing the quantities to be reordered, but can also be much more complex depending on your company's specific needs.

Finally, the results generated by Lokad can be accessed either through dashboards located within the Lokad webapp itself, or injected into flat text files (e.g. CSV) in order to be automatically imported into other systems. Lokad also provides the necessary scheduling tools in order to achieve a complete automation of your daily or weekly processes.

Importing data into Lokad

Importing your business data into your Lokad account is the first step for actually starting to use Lokad. Lokad natively supports a list of popular third-party applications. If your business app is supported by Lokad, then importing your historical data can be done in just a few clicks. What's more, your business data will be automatically refreshed whenever a new inventory forecasting report is generated. After registering on Lokad's website, the system will immediately let you choose which business application you wish to import your data from (new supported apps have been added since this screenshot was taken):

Pick a data source to import into your Lokad account

In case your specific business application is not supported, then Lokad will import the necessary data from flat files (e.g. CSV) that can be uploaded into your Lokad account. These flat files are expected to contain, among other criteria, a list of your items (SKUs, products, barcodes) to be forecast as well as the historical demand for those items. Other data such as the stock-on-hand, stock-on-order, lead times or composition of kits can also be provided to Lokad in flat file format.

If Lokad does not yet support your business application, do not hesitate to request an integration, and Lokad's team will get back to you shortly with further details.

Performing the actual inventory optimization

Inventory optimization can be modeled as a two-step process. In the first step, one should estimate the future demand, which is best done with probabilistic forecasts. In the second step, one should balance the economic risks associated with possible scenarios in order to compute the most profitable decisions.

Forecasting the future demand is done through our forecasting engine which is completely automated and requires no fine-tuning, nor any statistical adjustments of any kind. In order to get accurate forecasts, you will typically need to gather data such as the list of your items (or products, SKUs, barcodes), the sales history and the purchase order history (for establishing the lead times).

Computing the most profitable inventory decisions, which typically means the "best" quantities to be reordered, requires combining several economic drivers such as the cost of inventory, cost of stock-outs, minimal order quantities, price breaks, etc. Through Envision, we offer tools that allow to quickly model all of those factors as an overlay on top of the probabilistic forecasts.

In order to support such advanced ordering scenarios that involve, for example, lot multipliers or container shipments, we suggest leveraging Envision's advanced capabilities. Envision is a tiny programming language accessible to advanced Excel users which offers the possibility to implement domain-specific ordering strategies that go far beyond the default capabilities of our forecasting engine in this area.