Demand forecasting: One way that SAP B1 helps cut down on inventory costs is through demand forecasting. This implies guessing what quantity each product will require in future. Analysis by SAP B1 looks at past sales data and identifies the trends in order that you may understand which are likely popular against those not popular products. By correctly predicting demand, there will not be overstocking of non-selling or understocking items sold out fast. 

Automating Replenishment: When you have installed SAP B1, it allows you to automate the process of replenishing your stock. The system can be set up to reorder the products automatically once they go below a certain quantity. It contacts the suppliers as soon as the stock reaches such a stage. The automation process is time saving and guarantees one enough stock without going through the cumbersome manual inventory checking. 

Warehouse Management: This is where SAP B1 comes in handy when managing your warehouse more efficiently. SAP B1 optimizes storage space and simplifies picking and packing processes, which are among its benefits. It can select the appropriate storing places for goods depending on their sizes and frequency of sale. Hence retrieval becomes easier and quicker for employees, reducing labor expenses and boosting productivity. 

Reducing Dead Stock: Dead stock is a term used to refer to items that sit in your warehouse for long periods without being sold. This can happen due to several causes such as alterations in customer preferences or overstocking. The SAP B1 aids in the identification of dead stock by giving elaborate reports on how long the stored materials have been there. Consequently, the company could clear this stock through discounts or combining it with others, thus creating additional space and reducing holding costs. 

Better Supplier Management: By maintaining a record of their performance, which includes their delivery time and superiority of products offered you will be able to negotiate favorable terms and prices thereby getting the most out of your investment cutting down on inventory costs even more. 

Real-Time Inventory Tracking: It provides current data on stock levels; hence you always have some knowledge about your current property and its location. Such visibility enables quick decision making, as well as fast responses to customers’ changing demands that reduces overstocking and out of stock risks.