Supply chain leaders are continually searching for ways to enhance inventory management, and major advantages are provided by the role of technology in the supply chain. Supply chain leaders should adopt these 11 steps to leverage technology and eventually optimize inventory management, instead of relying on conventional, obsolete inventory management best practices.
1. Categorize the inventory using ABC Analysis
Not a new notion is the use of ABC analysis to categorize inventory. Study of ABC helps supply chain executives understand stock operations and how the use of space relates to overall cycle times and productivity.
2. Acknowledge the link between sales and inventory
The next move is straightforward. The relationship between sales and inventory needs to be understood by supply chain leaders. The inventory can flow faster as sales grow. SKU proliferation and e-commerce globalization, however, make tracking sales sound daunting. Again, the role of technology is beginning to concentrate on data and its implementation.
3. Inventory Flows Use Technology to Understand
To understand product flows, supply chain leaders must utilize technology. The available kinds of technology vary from RFID-connected sensors to GPS-enabled systems. As supply chain leaders gain the ability to monitor more granular detail and data, with advanced analytics capabilities, such information can be analysed to understand how product moves inside and outside your warehouse.
4. Deploy Automation to reduce the inventory management burden
Inventory management needs to rise to a new level with so much knowledge available and the rise of globalized supply chains. Supply chain leaders need automated systems to complete processes of replenishment, understand when patterns are on the increase, and search for ways to prevent fulfillment problems.
5. Build a Tech Stack that improves inventory management
Inside your organisation, the tech stack should also improve inventory management. In other words , it is important to update legacy ERP systems which do not provide inventory management capabilities or the ability to see inventory across channels. In addition, within most systems, including labour and logistics management, the tech stack should provide inventory management functions.
6. Tackle Stock Surplus
Surplus stock is another problem in the modern supply chain. An outdated concept that was created when supply chains ran from one end of town to the other is Surplus safety stock. The surplus stock is expensive as well as risky in the global, e-commerce-driven economy. In addition, the surplus stock often contains goods that have been or do not have the same value as comparable products, such as damaged or faulty goods, sent back to the company.
7. In order to maximize on-hand inventory, take advantage of modern order fulfillment techniques, drop shipping,
The use of new order fulfillment techniques will minimize on-hand inventory levels and lower operational costs, such as cross-docking, drop delivery, and even BOPIS fulfillment. Such fulfillment models, however, include coordination and exchange of information between buyers, supply chain leaders, suppliers, and even carriers.
Good set off practices.
ReplyDeleteWould like examples of where these practices are being followed
ReplyDelete