Inventory control increases order fulfilment level
Inventory control is the management and coordination of all processes and procedures which support an effective inventory policy for your organisation. Managed correctly, organisations can benefit from increased customer service levels, reduced inventory investment levels and controled administration costs. This is achieved by using the right tools for better decision making by skilled inventory control resources who understand the impact that they can make on the business. Understanding how to manage demand with supply is the core focus of inventory control
Inventory Control: "Balancing demand and supply"
Controlling the level of investment to achieve a service target across the supply chain is dependant on a number of factors that an organisation must manage with skilled and equiped inventory control specialists. Each inventory control specialist plays their part either planning, coordinating tasks and managing the flow and accuracy of physical inventory. Success is achieved by having a solid structured platform that is system and process driven, consisting of:
- An integrated ERP system that supports finalcials and warehouse management processing
- The right inventory policy for your organisation
- Sales and operations planning process as a conduit
- Proper planning settings supporting leadtime, safety stocks, reorder points etc
- Updated inventory processes, procedures and is version controlled and followed.
- Inventory control process audit and controls for compliance
Inventory control "in a retail store"
In a retail environment, the objective is to have your stores ranged and laid out correctly with each shelf and display full of inventory to ensure that the customer has a wide selection to choose from. As the retailer is focused on velocity, inventory control can be quite challenging, especially if the wrong replenishment method is chosen.
Empty shelves at a retail store reduces the customer experience and can have a tendancy to create noise down the supply chain for most organisations who do not have a responsive supply chain. As space is a premium for the retailer, it is unlikely that there is any back office space to store excess inventory of all ranged products, so focus is placed on only storing promotion sku's or primary selling sku's for that store. The logistics challenges in managing the flow of goods from back office into a store environment are componded by the number of stakeholders involved in touching the inventory and the level of data integrity as some point of sale systems (POS) are not polled as frequently.
Inventory control "for a wholesaler"
wholesaler provides the retailer with an assortment of products and typically has a higher delivery frequency to stores as most progressive companies are adopting a direct to store policy (DTS) rather than to a DC. This process encourages the wholesaler to pick stock for each store and replenish based on sell through rates generated by polling each POS at store level. As noted in the retail store example, the extent of the error between physical and perpetual can translate into excess stock being supplied through a stock replenishment process. Identifying and correcting these errors can take some time, especially if the supply chain systems being used are not fully integrated.
Inventory control "for a manufacturer"
A manufacturer has a broad supply chain and can support thousands of sku's which encompasses raw materials, work in process, components and sub assemblies through to finished goods inventory. This volume presents a number of challenges for the stock control team as a number of sku's also changes its state i.e. from components to sub assembly then to finished goods. The importance placed on data integrity at the bill of materials, routings and item master level is extremely high and only complicates the challenge further if distribution resource planning is pulling stock to multiple stocking point locations such as warehouses or distribution centres.
Inventory control "Core focus in manuacturing"
- Tracks parts, sub assemblies and parts on allocation
- Inventory posting processing and timing
- Improvement in bill of material accuracy
- VMI for parts and sub assemblies
- MRO inventory can be tracked and managed
- FIFO and LIFO via Lot or serial control