On September 21, 2022, U.S. Federal Reserve officials raised interest rates by 75 basis points for the third consecutive time in their battle to curb the runaway inflation affecting the economy, while impacting consumers and straining the administration of President Joe Biden.

This decision is likely to cause economic difficulties for millions of businesses and households in the U.S. and around the world, as it increases the cost of borrowing, impacting consumer spending. The Federal Reserve expects interest rates to remain elevated in the coming months, possibly even years.

The above directly impacts businesses, especially critical processes within the company, one of which is the purchasing and inventory replenishment process. This is because many organizations finance their working capital for inventory through debt, and the interest rates on these loans significantly increase the cost of such financing.

One of the most effective ways to reduce these costs is by investing in smart technological solutions for purchasing and replenishment to optimize inventory, such as the successful Nash software by ATAsoft, recognized for the impact its implementation has on the finances and performance of its clients.

Other no less important reasons to invest in this type of technological solutions are:

• High levels of stockouts in inventory
• Low customer service levels
• High levels of shrinkage
• High orders and inventory costs
• Low inventory turnover
• Cash flow affected by high inventory levels

In difficult times of recession, there is no better antidote than efficiency in critical business processes. The new technologies available allow for achieving the best performance levels in many of them.

In many cases, in less challenging environments like extremely low interest rates, some companies stay in comfort zones and do not pay attention to the impact, for example, of business financial costs, service levels, and shrinkage.

However, it has been proven that in more turbulent economic cycles, inefficiencies come with very high costs, which strain liquidity and significantly affect the profitability and sustainability of businesses.

Key capabilities of an intelligent purchasing and replenishment solution.

•An intelligent purchasing and replenishment solution like Nash combines sophisticated algorithms for demand forecasting, service levels, seasonality, and current and in-transit inventory to generate a purchasing recommendation.

• The intelligent software is responsible for forecasting, suggesting what to buy, and in cases of higher automation and efficiency, placing the purchase order with the supplier with accuracy based on having the right and efficient quantity of product to meet the actual consumer demand while optimizing the invested capital.

• It also offers flexibility because it quickly adapts to inventory and storage policies and strategies to address market changes, business objectives, and supply chain constraints.

• It supports the segmentation and micro-segmentation of the product portfolio to adjust safety stock levels and optimize working capital investment for higher ROI.

• It supports executive decision-making by enabling strategic, informed decisions through scenario management capabilities.

• It allows classification of the product portfolio across multiple dimensions, showing the value and impact of each product on the supply chain. This is based on consumption patterns, revenue, margin, product maturity, channels, criticality, turnover, seasonality, and GMROI.

• Inventory management is highly customized to adapt to each business strategy.

Key Benefits of Investing in an Intelligent Purchasing and Replenishment Solution like Nash Software:

• Reduces Operational Costs
• Reduces Inventory Levels
• Shrinkage, orders, maintenance, insurance, transportation, stockouts
• Reduces Financial Costs
• Reduces Inventory Stockouts
• Increases Sales
• Improves Customer Service
• Improves Cash Flow, Turnover, and GMROI

With shorter product lifecycles, new competitors, higher financing costs, supply chain uncertainties, and expanding networks of partners and suppliers, companies need to detect, process, plan, and respond to changes in real time.

Nash’s purchasing and replenishment planning capabilities help organize the right inventory across your entire distribution network, minimizing stockouts and maximizing inventory turnover in your supply chain. With Nash, you can achieve a solid return on your invested capital and minimize inventory while maintaining the high service levels your customers expect.