Inventory management is one of the pillars of a successful retail business and especially critical in the highly competitive eCommerce marketplace. While this statement would seem to go without saying, in the real world, effective inventory management can be very to achieve because of all of the moving parts. Effective inventory management requires first a focus on the basics; attention to detail, strong process management and determination especially when supporting controls and investigations.
Effective inventory management requires execution of complex global inventory management strategies, along with collaboration across internal and external partners that all come together to support the inventory management processes and procedures that support the highly volatile business demands. A focus on inventory management and control is required to support the extended global supply chain that is now key to the retail marketplace.
Inventory management provides the foundation of tools, process and procedures required to succeed in the global retail marketplace. It may not be a flashy capability but it is a base requirement to support the flashy side of retail . Bad inventory decisions can kill an organization’s profitability and wreak havoc on the supply chain. Developing and implementing inventory management controls as part of a seamless global logistics program doesn't just happen overnight. The successful inventory management program will be based on the following building blocks:
Collaboration program across the entire extended supply chain
Logistics planning, forecasting and analysis accuracy through robust sales and operations planning
Cycle counts to eliminate physical inventory
Product count program based on velocity and product demand to ensure availability for high demand product (A, B, C velocity usage)
How often do you analyze the velocity?
Inventory turn management that includes continuous review:
How do you improve inventory turn?
How do kits and co-pack products impact inventory and inventory turn
Inventory stocking practices in a multi DC network
Advanced Analytics supporting forecasting and planning
Inventory planning and forecasting provides an important feature and support in an effective continuous improvement process guiding inventory management practices in the global market. The accuracy of the planning and forecasting are enhanced by the volume of data available from the extended supply chain partners and requires a robust set of tools to perform the analysis. This begins with a focus on implementing and maintaining the fundamentals of inventory management and controls including robust programs starting with manufacturing planning, through cycle count procedures to ensure accuracy through inventory performance analytics supporting forecasting and planning.
Technology adds value to the continuous improvement process by providing a framework that integrates the data available from the from planning and forecasting with the process execution data to improve the ability to sense and respond in a continuous manner. Technology has become an integral partner in these activities to provide the connectivity required for the extended supply chain partners create knowledge from the vast amounts of data that are available. A robust continuous improvement program allows the supply chain partners to sense and respond to the changing inventory control demands that are increasing in both velocity and impact on the supply chain success,
Technology and collaboration has reached the point now where inventory management and control can fully utilize and take advantage of the volume of data to increase the effectiveness of the continuous improvement procedures and data volume support should not be considered a limiting factor. Big data capabilities provide the opportunity for each of the partners in the extended supply chain to both share and utilize data that would not have been imagined even three years ago and by the same token the capabilities of three years from now will be light years ahead. The focus of the supply chain partners must be on starting the continuous inventory management process and to develop the collaborative processes and procedures that will encourage experimentation and improvements.
Effective inventory management requires execution of complex global inventory management strategies, along with collaboration across internal and external partners that all come together to support the inventory management processes and procedures that support the highly volatile business demands. A focus on inventory management and control is required to support the extended global supply chain that is now key to the retail marketplace.
Inventory management provides the foundation of tools, process and procedures required to succeed in the global retail marketplace. It may not be a flashy capability but it is a base requirement to support the flashy side of retail . Bad inventory decisions can kill an organization’s profitability and wreak havoc on the supply chain. Developing and implementing inventory management controls as part of a seamless global logistics program doesn't just happen overnight. The successful inventory management program will be based on the following building blocks:
Collaboration program across the entire extended supply chain
Logistics planning, forecasting and analysis accuracy through robust sales and operations planning
Cycle counts to eliminate physical inventory
Product count program based on velocity and product demand to ensure availability for high demand product (A, B, C velocity usage)
How often do you analyze the velocity?
Inventory turn management that includes continuous review:
How do you improve inventory turn?
How do kits and co-pack products impact inventory and inventory turn
Inventory stocking practices in a multi DC network
Advanced Analytics supporting forecasting and planning
Inventory planning and forecasting provides an important feature and support in an effective continuous improvement process guiding inventory management practices in the global market. The accuracy of the planning and forecasting are enhanced by the volume of data available from the extended supply chain partners and requires a robust set of tools to perform the analysis. This begins with a focus on implementing and maintaining the fundamentals of inventory management and controls including robust programs starting with manufacturing planning, through cycle count procedures to ensure accuracy through inventory performance analytics supporting forecasting and planning.
Technology adds value to the continuous improvement process by providing a framework that integrates the data available from the from planning and forecasting with the process execution data to improve the ability to sense and respond in a continuous manner. Technology has become an integral partner in these activities to provide the connectivity required for the extended supply chain partners create knowledge from the vast amounts of data that are available. A robust continuous improvement program allows the supply chain partners to sense and respond to the changing inventory control demands that are increasing in both velocity and impact on the supply chain success,
Technology and collaboration has reached the point now where inventory management and control can fully utilize and take advantage of the volume of data to increase the effectiveness of the continuous improvement procedures and data volume support should not be considered a limiting factor. Big data capabilities provide the opportunity for each of the partners in the extended supply chain to both share and utilize data that would not have been imagined even three years ago and by the same token the capabilities of three years from now will be light years ahead. The focus of the supply chain partners must be on starting the continuous inventory management process and to develop the collaborative processes and procedures that will encourage experimentation and improvements.
