6 Steps on How to Improve Your Inventory Position

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: 

  1. Inventory KPIs: Establish inventory KPIs reporting to strategically monitor your inventory levels and metrics (Days on Hand, Inventory Costs, etc.) 
  2. Inventory Management Parameters: Regularly review order min/max levels, lead times, and minimum order quantities 
  3. Slow-Moving & Obsolete (SLOB) Inventory: Develop SLOB reporting and processes to manage non-productive inventory 
  4. Integrated Business Planning (IBP): Leverage IBP processes to drive collaborative planning across sales, finance and supply chain functions 
  5. Cycle Count & Inventory Audits: Ensure cycle count and inventory audit best practices are being used and followed to enable accurate inventory management 
  6. FIFO & FEFO Strategies: Implement First-In, First-Out or First-Expired, First-Out strategies to optimize inventory productivity