5 Steps to Boosting Your Inventory Efficiency

0
28

5 Steps to Boosting Your Inventory EfficiencyExperienced managers know that an organization’s supply chain can cost up to 25 percent of their firm’s operating budget. Good managerial practices can yield a higher level of internal transparency. Improved transparency via supply chain visibility can create opportunities for inventory efficiency optimization, which will enhance profitability. Several key features pertaining to the advancement of peak inventory efficiency are outlined in the following five steps.

Step One: Adopting a Holistic Approach

Optimizing inventory efficiency is an important initiative. The key feature of any effective effort should include a commitment to examining every aspect of the enterprise, rather than just a “window” into certain operations. This holistic approach should include the whole of the supply chain, upstream and downstream.

Step Two: Employ Real-time Analytics

Rapid, interactive and accurate inventory planning can only take place in an environment that supports real-time data collection and analysis. Your latest inventory efficiency initiative should be based on what is happening now, at the moment. It should not rely upon data or metrics taken from a previous quarter. There are many kinds of analytics software that use real-time numbers and highlight important figures and trends.

Step Three: Deploy Optimized Transportation Logistics

The coordination of logistics optimization efforts with inventory and vendor strategies will help you squeeze inefficiencies out of your supply chain. This will also help your organization strengthen its relationship with vendors and customers. Every effort given to inventory optimization should include a strategy to optimize the organization’s logistics. Meyers Transport Ltd. of Peterborough, Ontario is a logistics solutions provider to enterprise in the region. It operates an extensive terminal network stretching between southern Ontario and western Quebec, and these types of networks can be great for maximizing your transportation logistics.

Step Four: Consider Particle Swarm Optimization (PSO)

You can build a better and smarter company by studying and bringing to bear the power of Particle Swarm Optimization. PSO is a supply chain analysis methodology that relies upon the Particle Swarm Optimization algorithm—the best-of-breed inventory optimization algorithm. According to the International Journal of Computer Science and Information Security, (IJCSIS), PSO teaches the extended enterprise how to maintain optimal stock levels of inventory items within every link of the supply chain.

Step Five: Develop an Obsession for Attributes

In many cases, it is not sufficient to track just the lot numbers of your products. If some of your products have special attributes or subcomponents, these must be tracked as well. In the event of a recall or similar adverse event, it will be monumentally helpful to your firm to be able to trace the problem back to a singular cause. If your problem can be attributed to a vendor supplied component, you have a case to make to that vendor or your insurance carrier to help recoup your losses.

The manner in which an organization manages its inventory greatly affects its salability. Salability influences the speed at which inventory moves through the supply chain. The more saleable a product is, the faster it moves. Fast-moving inventory brings in cash faster than slow-moving inventory. To this end, any effort applied toward optimizing inventory efficiency within the extended enterprise will likely pay dividends in terms cash-flow and profitability.

Comments Closed