Inventory is often the single largest asset in most companies across any industry. It consumes a lot of cash, impacts return on investment and profitability, enables or impedes growth and customer satisfaction, and requires a tremendous amount of resource to manage it. Inventory Management is critical.
Yet a lot of companies big and small, well known and startups, struggle to manage Inventory effectively.
In this “Featuring” series article we are putting the spotlight on Inventory Management. We are presenting our Top 10 Inventory Management articles with techniques and approaches which will have something for everyone to learn from and apply in their own situation.
1. Inventory Turnover Breakthrough … Go Back to the Basics!
I am always surprised by people who believe that you need highly sophisticated and complicated systems and processes in order to drive Inventory turnover improvements.
In our experience it is most important to go back to the basics. Think about the very basic business processes that are involved in Inventory Management: which processes control the rate at which you move inventory into your business, through your business, and out of your business.
Keep it simple! We’ve achieved industry leading results using this approach.
2. Do You Want Inventory Turnover Breakthrough? Define and Manage the Levers!
In conjunction with our article on “Going Back to the Basics” it is important to map our the most impactful processes that control the rate of Inventory flow into, through, and out of your business.
Pick a few key business processes defined that will have the greatest impact on Inventory turnover and choose to improve those specifically. Often people either pick only one business process to improve or they pick far too many processes to improve.
One you have defined this limited number of high leverage processes you have a manageable scope to drive the greatest impact in Inventory Management.
3. Double Inventory Turnover in 9 Months!
I joined a Supply Chain services company that had logistics and distribution as its core offering. Much to my surprise the inventory turnover level was only around 7 times a year, which is not very impressive if you are telling your customers how great you are at Supply Chain.
Using the principles and approaches we’ve discussed in other articles we set about to improve the Inventory Management processes and results.
Within 9 months we had doubled the Inventory turnover in the company moving it from being an industry laggard to being an industry leaders. Read about our journey and how we achieved these results.
4. Achieve Breakthrough Results! Go From Worst to First!
The company had perennial had the worst Inventory turnover performance in the Industry. But the Board had enough and charged my Boss with getting this back in line quickly.
My Boss asked me to step in and take on this challenge. I had seen a lot of my predecessors try this and fail. So I needed to take a different approach.
Using the techniques and approaches we’ve discussed elsewhere we began this journey which resulted in the company leading the industry in Inventory turnover only 9 months after we started the project.
5. World Class Inventory Turnover Breakthrough Elements! (Infographic)
There are many different approaches that people take to tackle Inventory Management. Based on our experiences we felt that it was important to share the elements of effective Inventory Management approaches that we’ve used to great effect.
We captured this approach in an Infographic. As with anything it is a reflection of our successes, failures and learnings across many organizations, industries, cultures and geographies.
6. Part Shortages? What is Your Supply Line Strategy?
The stereotypical Inventory Management dilemma is that you either have too many of the wrong parts and not enough of the right parts.
In particular Part Shortages can bring your company to its knees. Shortages will stop your manufacturing lines, impede your retail and online sales, and cost you customers, profit and business growth.
Having a strategy for managing material shortages will do wonders for preventing, or mitigating, the impact of these issues and preserving your ability to drive exceptional Inventory performance.
7. Confessions of a High Priced Expediter!
A key element of any part shortage mitigation strategy has to be having a Supply Line recovery process. Anyone in Supply Chain knows that this means having resources and processes for the expediting the supply of parts.
Having spent a lot of time and energy in expediting part shortages we felt that it was most appropriate to share those experiences for the benefit of all.
Fast, efficient and effective part shortage expediting will get your Inventory Management plans back on track with minimal impact.
8. 4 Challenges in Starting and Sustaining a SIOP (S&OP) Business Process!
One of the key aspects of effective Inventory Management is to have a highly integrated SIOP (Sales, Inventory and Operations Planning), or S&OP, business process.
If you don’t have a SIOP business process in place you will face many obstacles and hurdles in getting it started. And even if you have a SIOP business process that is being used it can be just as difficult in keeping it going.
Our article talks about the very real challenges that you must recognized, and overcome, on your journey to manage not only Inventory but your entire business operation.
9. Using Lean to Manage Inventory
Most of use have heard of, if not been involved in, Lean process improvement programs. Typically associated with improving manufacturing processes Lean is also applicable for Inventory Management.
This guest article from Veridian is a great discussion on how to use a Lean program to manage Inventory.
10. Solving the Out of Stock Problem! (Infographic)
Having worked in Retail I know how quickly everyone gets upset, from the CEO on down, when a store is out of stock of a particular item. While forecasting, fulfillment and replenishment are not exact sciences there is often no to little understanding of this complexity outside of Supply Chain.
This Infographic from 2flow discusses measures to take to reduce stock outs in your retail, and other, environments.