Karsten Horn, Director of International Sales at INFORM explains how Multi-Echelon can revolutionise your inventory management. TAGS: cost efficiency , inventory management , multi-echelon optimisation , network structure , supply chain management.
Inventory management – the great balancing act
In the current economy, businesses are constantly looking for ways to protect their profit margins. This leads to an inventory management high-wire act; on one hand, consumers demand maximum availability but on the other hand, storing high levels of stock increases costs.
Many businesses opt to store stock across central, regional and local distribution centres to help ensure item availability and offer quick delivery times to consumers. Various risks within supply chains, such as fluctuating demand, results in inventory managers holding safety stock to guarantee availability. However, by holding high levels of stock to protect the network from uncertainty, businesses often have a vast amount of redundant inventories which can have a major impact on the profit margin.
Businesses should not accept this loss of capital as part and parcel of the supply chain, especially when a more strategic approach to inventory management can reduce costs and therefore support competitiveness.
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Article Source: : SC Management