First of all, I’m not sort of expert, but with the help of my husband, I will do my utmost best to help my readers, such as you, who is business owners or an inventory management clerk that knows the dilemma of stock shortage, messy schedule of restocking, and other kinds of the common problem with the inventory management. Whether you are one of them or not, reading this article will give you an insight into how you will improve your business inventory management. Let us begin by saying your inventory management is a target safety stock or an inventory level. Business owners view inventory as an investment. Then, which you might as well already thought the questions of the following… What strategies do I need to be adopting? What are the capabilities that I have within my network in terms of the physical infrastructure to manage inventory strategy? What sort of technologies and tools can I use to optimize my inventory? Will I be able to maintain the MRO (maintenance, repair, and operation) cost? And so on… The answer to your question starts with the solution that I will strongly recommend is “inventory optimization”. I will explain in some details which will be easy to comprehend what is inventory optimization. Also, how can help and gives you the benefit of having to your business or inventory management?
What is Inventory Optimization?
Inventory Optimization lets you meet your target service levels even though you have the minimum amount in the inventory. It is possible to breakdown the area of your inventory by demand forecasting, inventory policy, and restocking schedule.
By predicting future demand as accurately possible. You may use the statistical data from all previous transactions to learn how item demand changes and which season the demand is high. Then you may be able to plan without having stress and be able to plan promotion and campaign to promote your product(s).
Whether you have more than one warehouse or stock room deciding which item and how many quantities to stock is a must or very important. Especially if you have a product that has an expiration date. Also, to know the value of all your SKU (stock-keeping unit) for your business, and don’t forget to use ABC analysis. Stock-keeping unit is known as a scannable bar code or the serial number of a product. Most often seen printed on any product labels, this allows the seller or vendor to track automatically the stock and movement of the inventory. While the ABC analysis is an inventory technique to categorize each stock, which allows inventory management, such as stock clerk, to analyze the value and differentiate each product. Therefore the inventory was grouped into three categories of A, B, and C. This help to estimate the importance of goods. Such as the good that has expiration; You can group the goods into expired goods, near expire goods, long expiration goods. Also, it helps the inventory management to track and cover the sudden changes in supply or demand.
Restocking, helps the inventory management to re-order near-perfect quantity at the right given time, depending on the demand forecast and current stocks, such as the seasonal product or goods. But always remember no one can perfectly order the right amount or quantity of product or goods. But with the help of demand forecasting, you can expect the inventory management to have a near-perfect quantity when re-ordering products. Also, with the RSO (resource scheduling optimization) can help you with tracking all your current stocks and schedule your re-ordering ahead of time. This allows you as well to configure or set the schedule based on your organization’s needs and supplier lead time.
The bottom line is we can see the inventory optimization as being a huge step beyond the basic demand-supply. As you can see the companies have implemented in the supply chain over the past several layers. It’s a great baseline that helps them to drive their businesses. But to get to the next step in terms of leveraging inventory, as a strategic advantage to take market share, and to drive greater value the inventory optimization is a very profitable investment to business owners. Just applying inventory optimization to your business or inventory management will increase earning and decrease losses? Hopefully, I was able to help you to optimize your inventory.
If you have further suggestions or opinions wish to add, or maybe a correction to the content of this article please don’t hesitate to contact me or leave a comment below.
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