Strategic inventory management is vital to ensuring product availability, reducing operating costs, and freeing up essential capital. Due to its wide-reaching impact, effective and accurate inventory management serves as a cornerstone of an efficient and resilient supply chain. Here’s how to optimize your inventory position:
- Inventory KPIs: Establish inventory KPIs reporting to strategically monitor your inventory levels and metrics (Days on Hand, Inventory Costs, etc.)
- Inventory Management Parameters: Regularly review order min/max levels, lead times, and minimum order quantities
- Slow-Moving & Obsolete (SLOB) Inventory: Develop SLOB reporting and processes to manage non-productive inventory
- Integrated Business Planning (IBP): Leverage IBP processes to drive collaborative planning across sales, finance and supply chain functions
- Cycle Count & Inventory Audits: Ensure cycle count and inventory audit best practices are being used and followed to enable accurate inventory management
- FIFO & FEFO Strategies: Implement First-In, First-Out or First-Expired, First-Out strategies to optimize inventory productivity