Posted by Nicole Pontius in Asset Management Resources A Definition of Inventory Control Inventory control, also referred to as stock control, is so broad and incorporates so many functions that it is difficult to describe in a limited definition, but we like how this Inc. When you maintain proper inventory levels, you can rest easily knowing that your capital is not unnecessarily tied up in your inventory.
Traditional inventory systems have always focused on improving forecasting, while the forecast is only a small part of the overall inventory management problem. A new paradigm is needed — one which brings all factors into play, and which enables a proactive approach to solving inventory problems before they occur.
However, order quantities, safety stock and lead time represent only a minority of the sources of inventory problems. Poor execution is common at all levels of the supply chain and starts at the store level. Promotional displays or inventory make it to the store but not to the floor.
Product is put on the wrong truck at a distribution center, sent to the wrong store, or is late to a distribution center. Poor communication is common both within and across supply chain functions, and takes a particular toll in data analysis and collaboration.
Analysts, category managers, sales managers and supply chain personnel look at problems in different ways and focus on different aspects of them.
Getting insights from data is often a complex process for CPG data analysts, making collaboration difficult.
Poor decision-making is endemic at all levels of the supply chain, and is often the result of both poor execution and poor communication. There are so many different SKUs in so many different stores, from so many different distribution centers, in so many different locations in the stores, under so many different conditions.
Consequently, shortcuts are almost always taken, which may compound the problem or lead to new ones. A Virtuous Cycle in Inventory Management Above, we outlined some of the issues with traditional inventory management. In particular, that poor execution, communication and decision-making in inventory management contribute to a vicious cycle of declining sales, margins and customer loyalty.
To address this vicious cycle, the CPG supply chain needs a system to identify and correct problems before they occur. This requires monitoring of many different genres of information — POS, shipments, orders, forecasts, forecast errors, on-hand inventory, inventory position, number of stores selling, etc.
Let us explore how to create a virtuous cycle: To implement this approach, a system is needed to alert users to what needs attention, and enable them to quickly resolve issues. It should help users identify patterns of exceptions and support collaboration to define and implement prevention mechanisms, using levers not limited to safety stock, forecasting, and ordering algorithms.
This is actually the supply chain management implementation of business process integration. Advanced inventory management solutions are discussed within the vague context of multi-echelon inventory systems or warehouse locations.
But where do stock-outs hurt the most in terms of lost revenue?About Us. SCOPE Middle East is an award winning specialty value-added distributor providing advanced network performance and security solutions in the Middle East & North Africa Region.
Inventory Classification - ABC Classification, Advantages & Disadvantages Inventory is a necessary evil in any organization engaged in production, sale or trading of products. Inventory is held in various forms including Raw Materials, Semi Finished Goods, Finished Goods and Spares. To keep inventory at sufficiently high level to perform production and sales activities smoothly.
To minimize investment in inventory at minimum level to maximize profitability. Other objectives of inventory management are explained as under: 1.
To ensure that the supply of raw material & finished goods will remain continuous so that. How can you easily track inventory?
Learn why Excel for inventory management does not work and how to solve your inventory headaches. Sales and Inventory System.
of business. The manual system is now considered obsolete after the birth of the computerized regardbouddhiste.com-line transaction is now very common to widen the target market of the companies.
It becomes more attractive to the clients considering it .
A good inventory management strategy improves the accuracy of inventory orders. Proper inventory management helps you figure out exactly how much inventory you need to have on-hand.
This will help prevent product shortages and allow you to keep just enough inventory .