Best Practices for Inventory Planning
Supply chains struggling with inventory planning face low service levels and dead stocks. If you feel like you have too many of the wrong products and not enough of the right ones, this article is for you.
--
Inventory Done Right. Stocking products is helping companies around the globe to supply their clients on time while providing a buffer against any unforeseen event (we are looking at you 2020, 2021, and 2022). Ordering the right quantities at the right time while synchronizing your orders towards your suppliers will allow you to reduce your shipping and transactions costs while maximizing your service levels.
So far, so good: having inventory seems like a dream come true.
Inventory Done Wrong. Nevertheless, holding inventory comes with drawbacks. The first one is, of course, its cost: inventory is nothing more than sleeping cash that is depreciating over time. It costs money to buy products, and it costs money to store them: warehouses aren’t free and are limited in storage capacity. Moreover, keeping inventory comes with risks: will you really be able to sell all these products? Won’t they get obsolete, outmoded, or expired before they get sold? Keeping less inventory might partially prevent the risk of dead stock but won’t help to provide adequate service levels to your clients.
The more you keep, the higher the cost and the riskier it gets. And if you’re not cautious, you will soon stockpile outdated products and miss out on your best sellers.
In this article, you will learn best practices to manage and review your inventory levels. As you will see, hiring an army of planners to perform mundane tasks in Excel won’t do the trick. Instead, following the proper best practices and investing in specialized software will allow you to keep up with industry leaders such as Walmart and Amazon with minimal effort.
In short, work smarter…
