Do you believe that inventory optimization is necessary for the operational and financial performance of the organization? What experience/s have you or your supply chain team had with inventory optimization initiatives and did they prove to be successful?
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We believe it is and this topic is one of the values we provide customers- simply put, inventory being held by the customer represents an opportunity cost by negating the customer's ability to invest those assets elsewhere and creates a need to provide resources to manage the inventory efficiently.
I recommend partnering with your suppliers to know your usage, lead times, what the supplier can hold on hand for you, and understand what inventory is mission critical to your organization (if you don't have it when it is needed, your operations shutdown). This is an activity we complete on a regular basis with the customers who manage their inventory through vendor managed inventory- as the data should be more readily available.
Good question. I enjoy reading the comments. Thank you for sharing.
Yes, definitely! I have seen companies struggling with too much inventory and went under if could not manage it properly.
Inventory optimization is achievable and it needs to maintain the optimal balance on a regular basis regardless of manually and automatically. This is where AI/ML become helpful. It’s been here in some supply chain optimization solutions and shown successful results.
Many companies don’t have the accurate data that reflects the actual inventory. That’s where the mess comes from and prevents them to make the inventory optimization work.
Inventory = asset, the faster you can turn it into cash the better cash flow you get. Too much inventory = too much capital tied into your operations.
I really could not add much more than my peers here below, but can only reconfirm what they said already.
Based on my experience, inventory optimisation is not a project (or subsequent, but distinctive projects), but a continuous monitoring and adjusting activity based on how the business is doing and is very much part of the strategy of the business along the full value chain.
I'm happy to see that this is still on the menu as a topic as many businesses still haven't managed to actually manage their inventories!!
📦💼 Inventory Optimization: A Game-Changer for Operational and Financial Performance! 💯
As a supply chain professionals, we firmly believe that inventory optimization is crucial for any organization's success. It's not just a theory, but something we've experienced firsthand at SupplyChainWise when supporting clients big and small!
Transparency across the supply chain is key to making informed decisions and achieving peak efficiency. At SupplyChainWise, we emphasize transparency as a cornerstone of our approach. 🌐✨
Non-optimized inventory holding can have serious repercussions, impacting both operational and financial performance. Excessive inventory ties up valuable capital, increases holding costs, and can lead to obsolescence. In contrast, stockouts can result in missed sales opportunities and dissatisfied customers. It's a delicate balance that requires smart solutions. ⚖️
At SupplyChainWise, we've witnessed remarkable benefits with inventory optimization initiatives. By leveraging advanced technology and data-driven insights, we've seen reduced carrying costs, minimized stockouts, and improved order fulfillment rates. The optimized supply chain fosters better customer satisfaction and unlocks opportunities for business growth! 🚀📈
Managing working capital is fundamental to overall EBITDA performance, COGS, COS, and margin control. Using predictive analytics tools and scenario modeling technologies is vital to assessing consumer demand, improving demand forecasting accuracy, and managing carrying stock levels. Failure to manage inventory levels effectively can lead to capacity constraints, resulting in added operating overhead and labor costs. Developing and implementing a mature and innovative inventory optimization program is key to driving financial performance.