Optimization of inventory management through business intelligence solutions: Reducing costs and increasing profits.

Feb 26, 2023

Inventory management is a critical component of the success of any business.

Inventory management is of vital importance in any company as it allows on the one hand to ensure the availability of products when and where customers want them, thus allowing the realization of a sale, and on the other hand to avoid excess tied-up capital. Efficient inventory management also helps to maintain a balance between supply and demand, avoiding product obsolescence and reducing storage and logistics costs.

Poor inventory management generates significant costs. For example, in the U.S. market, it is estimated that companies lose between 5% and 10% of their sales due to poor inventory management[1]. In addition, according to Deloitte[2] 80% of retail companies do not have a complete understanding of their inventory data and are unable to identify top and bottom sellers Inventory mismanagement is a common problem faced by many companies that has significant negative impacts on their bottom line. Some of the associated costs include:

  1. Excess inventory: Companies may order too much inventory, resulting in higher storage costs, obsolescence and possible losses due to damage or shrinkage.
  2. Stock-outs: On the other hand, companies may order too little inventory, leading to stock-outs, with the consequent loss of sales and customers.
  3. Increased costs: Handling inventory above optimal levels generates higher transportation, insurance and administration costs.
  4. Inefficient processes: Manual inventory handling or slow counting cycles can lead to human error and higher operating costs.
  5. Poor customer service: If inventory data is inaccurate, companies may have difficulty fulfilling customer orders in a timely manner, causing poor customer service and possible loss of customers.


Why do companies fail to properly manage their inventory?

Often, companies fail to properly manage their inventory due to a lack of accurate data and in-depth analysis of their inventory management activities. Without accurate information, companies often have inadequate demand estimation, poor management of raw material purchases and poor production management.

Business intelligence solutions help companies overcome these problems by providing accurate data on inventory levels, sales trends and demand forecasting. With this information, companies can make informed decisions about their inventory management, reducing the risk of overbuying or stock-outs. Over time, continuous improvement in inventory management reduces warehousing costs, improves customer service and increases profitability.

Implementing a business intelligence system in your company will allow you to answer several critical inventory management questions, such as:

  1. Am I maintaining the right level of inventory to meet customer demand?
  2. Am I wasting money by having excess inventory? Of which products and in which locations and/or warehouses do I have the largest surpluses?
  3. Am I missing sales opportunities due to a lack of available inventory? How much sales potential am I losing at each location?
  4. Which products have the fastest inventory turnover and which are on the shelf the longest?
  5. Am I accurately forecasting demand and the amount of inventory needed to meet it? Do I have major deviations or inefficiencies in different products or channels?
  6. Am I considering the replenishment time of each product to estimate the appropriate inventory level?
  7. Am I having problems with inventory management of obsolete and/or discontinued products and how can I solve it?
  8. Do I know my core products that generate 80% of my sales? Am I managing them efficiently?

The results of these analyses can be used to inform strategic and operational decisions about inventory management, which will improve its efficiency and optimize the company’s bottom line.

inventory management

Leading companies have implemented business intelligence solutions to successfully manage their inventory.

Walmart, the world’s largest retailer, has built the Data Café to integrate and analyze the information generated by its different business processes. This tool answers critical business questions and provides fast and effective solutions to business challenges, enabling employees to make informed decisions based on accurate data.

With this solution, Walmart was able to improve the accuracy of its demand forecasts, optimize inventory management and improve customer relations. Positive results included a significant reduction in the level of obsolete stock and an improvement in inventory turnover. In addition, the system also allowed Walmart to improve the shopping experience for its customers, as adequate and up-to-date inventory ensured that the products ordered were available in the stores.

As Naveen Peddamail, Senior Statistical Analyst, said, “If you can’t get information until you’ve analyzed your sales for a week or a month, then you’ve lost sales during that time.”[3] If you can’t get information until you’ve analyzed your sales for a week or a month, then you’ve lost sales during that time.”[3

In short, the business intelligence solution enabled Walmart to make informed decisions about its inventory and optimize its management, resulting in a significant improvement in its financial performance.[4]

And what are you waiting for?

Surely you think that a solution is only accessible to large corporations like Walmart. However, bintelligenz is the only complete, affordable and easy-to-implement business intelligence solution that gives you the same competitive advantages as Walmart’s solution. With bintelligenz, you can get a world-class business intelligence solution in as little as one month for only $320. The solution is easy to implement and integrates with existing information systems, which means no costly integration projects.


In conclusion, inventory management is a critical component of any company’s success, as it directly affects costs and customer satisfaction. However, managing inventory properly can be a challenge due to the amount of data and factors that must be taken into account.

A business intelligence solution like bintelligenz helps improve inventory management by providing accurate and timely information to support informed decision making. bintelligenz enables the integration, analysis and presentation of relevant inventory data, making it easier to identify areas for improvement and optimize processes. By improving inventory management, a company can reduce costs, improve customer satisfaction and increase its overall efficiency. In summary, using a business intelligence tool is an important step in achieving effective inventory management and improving the company’s bottom line.

[1] Deloitte consulting firm report “Retail Inventory Optimization: Achieving the Right Balance for 2019 and Beyond”.
[2]Retail Systems Research market report “The Inventory Imperative: Putting Data at the Center of Retail Inventory Management”.
[4]For more information, see https://medium.datadriveninvestor.com/walmart-taking-a-giant-leap-towards-data-analytics-and-supply-chain-analytics-2c48c9e38f9d or https://d3.harvard.edu/platform-rctom/submission/digitization-of-walmart.

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