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Supply Chain Management is one of the crucial factors that help in the smooth growth of an organization or a business. It caters to the entire production flow of goods and services – starting from raw components to delivering the final products to consumers.
In this process, Inventory Management plays a vital role. Before going ahead, we must understand what Inventory Management means. It is the product or materials a company sells to the customers to make a profit. Being a part of the Supply Chain Operations, Inventory includes different aspects such as controlling and overseeing purchases from suppliers and customers, maintaining the storage of stock, controlling the amount of product for sale and also order fulfilment.
Inventory Management has three core steps. That is:
Inventory Management is the sustained key to success in Supply Chain Management Operations. It’s one of the most significant roles in Supply Chains is balancing demands and supply parameters. To effectively manage the flows in the supply chain, often companies have to deal with upstream supplier exchanges and downstream customer demands. Companies try to create an important equilibrium of fulfilling the demands of customers. This balance between demand and supply is achieved using strategic information. It helps in providing better inventory management.
Cross function information sharing
To help achieve the demand and supply balance, businesses implement sales and operations planning (S&OP) processes. The fundamental purpose of S&OP is to bring the demand management functions of the company together with the operations functions of the company.
This process often involves extensive discussions about the company’s inventory in hand to help get a better and fast growth. These discussions allow both the sales and marketing functions to effectively plan for the smooth running of the organization.
Cross vendor information sharing
This balance can also be achieved by using point-of-sale data for inventory management in the retail industry and sharing this data with relevant mutually beneficial parties.
When a barcode is scanned during checkout it captures sales data. This information is tracked by retailer and is also shared with upstream vendors.
Demand information is tracked to determine best place replenishment orders based on the lead time which is required to get the inventory to the store location. This helps inventory decisions to be used effectively. It is very vital in times when supply inflows are needed to handle demand outflows.
To bring this balancing act into fruition and proper working, inventory management solutions is pivotal.
To understand and learn Inventory Management and Supply Chain Operations enrolling in courses that provide a clear perspective of the domain could be the best way. The Advanced Programme in Supply Chain Management (APSCM) by IIM Calcutta train the working professionals and equip them with expertise to assume greater responsibilities.
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