The new software, called Dynamic Inventory Optimization, uses advanced data mining techniques to root out patterns relating to customer orders and stock levels.
IBM said the secret sauce lies in a patented optimization technology that it claims can help retailers cut their inventories by up to 40%.
The system works in near-real time. Previously retail forecasts have relied on weekly forecasts prepared using point of sale data. IBM’s application is quicker and broader, using the patented algorithms to analyze daily POS data against other relevant stock overage and shortage data sources which it then compares to retailer sourcing rules for optimal ordering and replenishment processes.
The application was developed by IBM’s research labs in Zurich, Switzerland and is available from IBM as part of a Global Business Services service engagement or as an add-on component integrated with client ERP implementations. It can also be deployed in a non-ERP environment as a standalone replenishment system.
