Why the Proper Management of Inventory Control is Critical to a Healthy Supply Chain
In order to maintain a healthy and successful supply chain, proper inventory control must be the main component of your business operations. As many companies experience ebbs and flow with material suppliers and customer demands, maintaining control of your product inventory in real time will ultimately ensure that the business decisions that your company is forced to make on the fly are both educated and anticipated.
Whether you are looking to mitigate costs or speed up the way your product reaches the hands of the consumer, managing your product inventory levels with the utmost vigilance could be key to a customer’s purchase of your product instead of the competitor’s. Here are three benefits that inventory control can bring to your business:
Proper Balance of Supply & Demand
Enabling your company to have the proper balance of supply and demand will allow it to run in the leanest manner possible. The possession of inventory can be considered an asset – but it is an asset that no company wants too much of – or too little. Finding that level of balance for your business is what will ensure a smooth process in both production and sales, as well as the operations within your warehouse. Implementing certain technologies, such as point-of-sale data from partnered retailers, could make a huge difference, providing real-time information to determine the specific time to replenish stock and fulfill customer orders without doing so in excess.
Minimizing Your Costs
By closely managing your inventory, you will also be able to make an impact on the various costs your business can incur over a period of time. As you maintain a lean operation, you will be able to eliminate costs associated with excess materials or shipping, as the data you possess provides you with the insight needed to make informed financial decisions. The manufacturer will also be able to reduce the amount of inventory they produce over time, potentially reserving components for future products that may be more profitable for the business in the long run.
Availability of Safety Stock
No matter how closely you manage your product operations, some factors can always remain outside of your control. Certain occurrences like a damaged or lost package or the fulfillment of an incorrect order could always throw your business for an unexpected loop. By closely monitoring your inventory levels and sales forecasts, you can properly anticipate these happenings by keeping an effective amount of safety stock on hand at your warehouse. This safety stock could also come prove beneficial in the event of a product shortfall due to demand having a sharp increase and the manufacturer being unable to get the desired product to your warehouse within the promised delivery time. Safety stock provides your business with increased flexibility.
Are you looking to implement some inventory control solutions into your supply chain operation? ModusLink has a variety of solutions available that can help improve your business. Contact us to learn more!
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