Meeting the inventory challenge
Posted on 1 November 2015
These days, businesses are competing more than ever before for the affections of customers. To woo them, organisations are realising that they have to understand what customers need and have a smart system in place to ensure stock can meet that demand.
So, how do you manage stock in the most efficient and profitable way?
The fact is, inventory management is a lot more complex than it can first appear, with a number of factors to consider.
The burden of inventory
Over the last twenty years, theory and practice from Japan – notably the Toyota production system, with its emphasis on driving out waste – the US and elsewhere, have introduced the idea that inventory is not necessarily an asset, but a source of cost risk and inefficiency. So whether it is raw materials, goods in-transit, buffer stocks, or finished goods, many businesses have got leaner. But tied in with this is the need to be muscular and flexible – ensuring goods are available to meet ever-changing customer needs. It can be quite a balancing act.
It might seem obvious, but one of the keys to stock efficiency is an in-depth knowledge of what you have in stock. But according to IBM, 79% of supply chain officers admit to a lack of visibility.* It’s quite a shocking statistic.
We believe the solution lies in knowing both core and non-core items and when they should be ordered. Core items are those that you sell year round and need to continuously replenish to meet an established schedule and product lifecycle. You must also understand what’s in stock, what is going to be ordered, the size of orders, and what needs to be replenished. Knowing your inventory can be a very cumbersome task but it is key to ensuring profitable business operations.
Many stock management systems are based on outdated software and, worse still, outdated manual processes. We recommend you take a long, hard look at your operating procedures and work out where the gaps and inefficiencies may lie.
Customers’ needs are changing daily, precipitating the need for flexibility in orders. The bottom line is, you have to keep up with the unique needs of your customers or they will vote with their feet.
Rest assured, there are inventory solutions. Enhanced supply tailored solutions that can give you complete visibility, in-depth knowledge and a nimble, responsive system – helping you tackle the challenges of stock, and enjoy growth and profitability.
For further information on how Enhanced can build an inventory solution around your unique challenges, contact a member of the team on 01202 308000.