No Fancy Numbers-Crunching Tools RequiredKnowing how to interpret data can help an organization better manage inventory and improve its bottom line.Whether large or small, many companies continue to struggle with inventory management. Larger companies can afford more complex software tools with forecasting algorithms, but often don’t have anyone in supply management with the skills to understand these tools and apply them properly. Smaller companies don’t have fancy inventory management tools; their inventory data is often stored in a home-grown database system.Regardless of company size, the challenges associated with inventory management are primarily the same. The use of analytics to help solve some of these challenges can be applied to all company sizes. Here are some strategic ways to look at data that don’t require complex software tools or large budgets.VARIABILITY IN SUPPLIER DELIVERYIn many inventory systems, promised lead time is used as a factor to calculate how much to order and when. That can yield a few surprises when supplier delivery performance doesn’t match what was promised in a contract.For example, suppose one of your suppliers has a contract promising to deliver product to your dock or warehouse in two weeks. You find that you are occasionally running out of these parts and losing customer orders. You decide to pull data from your system to compare the dates on which you placed orders and the dates on which you received product on your dock. You find that the supplier’s on-time rate is 80 percent. Analytics can be used to take supplier delivery analysis beyond the "percenton-time" metric to viewing histograms (frequency charts) of supplier delivery patterns.Suppose that with the 20 percent of shipments identified as late, you stocked out and left customers waiting. A customer waiting can be a customer lost. With analytics, the ability to know more about a supplier’s performance than just an overall on-time metric can be very valuable.By using these tools to interpret data, you can improve inventory management while helping the company’s bottom line.DUPLICATE SPEND COST SAVINGSIt is not atypical for large companies to form through organic growth as well as acquisition. When two companies merge, each company has its own set of suppliers and supplier contracts. While it may take some time to analyze, identifying duplicate spend within both companies can reveal cost-savings opportunities. Careful planning and timing can yield savings from large-volume discounts after combining common needs. Severing of extraneous contracts should be performed in accordance with termination clauses in each contract.Even without a merger, a single company should periodically scan for duplicate spend across functional areas. Smaller companies have fewer purchases on formal contracts, so as they grow, it is easy to create duplicate spend patterns that are not visible to purchasing professionals.