Manage Inventory with effective Inventory Control | A Turn Key Solution | Sydney
Inventory control is the management and coordination of all processes and procedures which support an effective inventory policy for your organisation. Managed properly, the benefits can contribute to increased customer service levels, reducing the level of inventory investment and controling the administration costs within the business. This is achieved by removing non value added activities involved in rectification of inventory errors across the supply chain.
Managed poorly due to the lack of process, procedure and systems knowledge by individuals, organisations can experience what is commonly referred to as the "bullwhip affect" where a minor variation can be distorted to create inflated demand which impacts on the supply chain down stream. Examples of these impacts are: excessive inventory, resource duplication while trouble shooting for solutions, storage problems and space constraints.
Other areas of interest for Inventory Control:
- Improve inventory control by developing the right inventory policy
- Inventory control relies on effective inventory procedures
- The importance of inventory classification
- The importance of having the right inventory system
- How proper inventory control disciplines can reduce inventory
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
A 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:
- 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
- Lot control and serial control
- FIFO and LIFO
Common problems with stock control
- Too much of the wrong stock
- Wrong product in location
- System does not match physical
Select a Supply Chain and Logistics Assessment that identifies real improvement.
We offer a range of assessments that are tailored to specific functions within your oganisation that require review. Depending on the scope of works or the scale of your organisation, our assessments are typically completed within 2 weeks of commencement for single site entities. Reference sites available on request.
