The competitiveness of a company can be significantly influenced by the choice of the appropriate inventory strategies. When excess stock is kept, deliveries can be processed at any time, however, inefficient processes are covered up and costs become increasingly difficult to control.
Keeping your inventory low reduces costs, but can affect your delivery performance. While companies strive for the right balance of inventory stocks they are confronted with changing customer requirements, uncertainties of demand and supply, as well as ever increasing market demands.
In order to ensure competitiveness, processes must be continually optimized and supported by up-to-date information. It is only on the basis of up-to-date and transparent inventory data along the value creation chain that the planning and replenishment processes can measure up to the demands of the market.
The unknowns that Logistics personnel face with warehousing and delivery schedules are usually compensated for by keeping a higher safety stock.
The objective, however, should be to reduce inventory by applying a time-conscious and integrated inventory management process, which would make the prognosis for demands more accurate, and maximise the degree of service. |
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