Global Supply Chain Group’s Guide to Inventory Management
Cost of inventory goes up and down with the rise and fall in interest rates
If you believe that your weighted average cost of capital is always going to remain low, then you may not need to ever bother about inventory management. On the other hand, if it could possibly get bothersome at some point in time, then you had better keep a close tab on your inventory levels.
This report is for CFOs, finance managers, lean managers, supply chain managers, inventory managers, inventory planners and other supply chain planners who want to focus on their inventories to optimise the inventories.
So what can go wrong with the inventories in a company?
The worst thing is running out of inventories when a customer needs an SKU. But that is not the only inventory problem we have seen in the past 23 years. Other inventory related problems that are even more common than that are:
- Too much inventory of everything in all places
- Excess inventory in the wrong places where goods are not in demand, and shortages in places where items are in demand
- Inventory of wrong things that are not in demand, and shortages of items in demand
All these are related problems and can change from time to time depending on the demand dynamics, as well as supply dynamics.
Does that mean that if you buy this guide all your inventory-related problems will disappear? You are right, inventory optimisation is an eternal quest, and you can only come close to an ideal inventory, but never get to it. Moreover, knowing what to do is one thing, and actually being in a position to do so it completely a different thing. So, if you are encountering blockers, we have other reports and guides talking about how to overcome those blockers.
What are the benefits of optimised inventories?
most benefits are already commonly known
- Cost reduction, and profit enhancement
- Warehouse space optimisation
- Obsolescence and write-off reduction
- More accuracy of inventory records – there is a tendency for accuracy to drop down when inventories get past a certain multiple of weekly demand
- Less pilferage, more secure warehouse and supply chain as inventory accuracy improves
- Better housekeeping in the warehouses – excess inventories seem to be stored in an ad-hoc manner
- Better fulfilment rates, happier customers, and market share gains
If you improve your inventory management practices, you will notice many of the benefits above.
If you want more information on this report – click here…