‘Supply chain operations’ involves managing inventory in a way that maximizes efficiency, optimizes performance and increases profitability. It’s inclusive of the entire inventory process, from initial procurement of stock, to adequate storage and maintenance of that stock, and then finally the completion of orders. In order to achieve success in supply chain operations, there are three main areas where inventory management professionals must focus their efforts on maintaining control.
The first step is ensuring that the proper amount of stock is ordered and maintained so that customer demand can be satisfied. This can be challenging in situations where the inventoried items are perishable, seasonal or have a specific shelf life. The key factors that go into inventory procurement are adequate knowledge of supplier lead-times, clear understanding of customer needs and expectations and accurate calculation of safety stock levels, just to name a few. Miscalculations can lead to costly overstock situations and, in many cases, spoilage or obsolescence of inventory items.
For best results, the use of inventory management software that provides better forecasting and automated functionality is recommended.
Once the items you need are procured, the next step in the process is ensuring that they are properly stored, counted, maintained and rotated, if necessary. The bigger the inventory, the more complex and critical this process becomes. For wholesale distributors and multi-facility warehouse managers, the use of an enterprise resource planning (ERP) tool is often necessary in order to accurately track incoming and outgoing items and manage in-stock inventory levels.
One area of the inventory management process that can cause businesses to struggle is the existence of silos. In other words, asking personnel to manage stock using a number of independent systems and applications. Not only does this increase the likelihood of costly errors, but it also reduces visibility into the entire supply chain operations process, which can make it difficult, if not impossible, to optimize. Instead, the use of one centralized system is strongly recommended.
The final step in supply chain operations is the fulfillment of customer orders. The goal is to keep backorder situations and delays at an absolute minimum, eliminating them altogether if possible. Without proper attention to this step in the process, customer satisfaction drops and subsequent turnover goes up. This could damage your reputation and ultimately affect your ability to attract new business. As such, stock levels must be optimized to meet fill rates in real-time by forecasting based on historical sales data, seasonal trends and other demand variances.
Again, the most effective way to manage the order fulfillment process and keep your customers happy is to leverage the power of technology to its greatest potential. Inventory management software can help by making each step in the process simple, fast and accurate.
Have you optimized your supply chain operations? Are inventory management woes plaguing your organization? The experts at Blue Chip are here to help. Give us a call today!