Every business today needs a good supply chain and inventory management to secure success in their field. Businesses in any field works today establishing a good supply chain and inventory management even though it can be a complex subject to ace. As Nancy Pelosi said, “We have so much room for improvement. Every aspect of our lives must be subjected to an inventory… of how we are taking responsibility” and this applies to every aspect of a business too.
Supply chain management is a critical component to any product-driven businesses. For successful supply chain management, understanding the four stages: purchasing, inventory control, order fulfillment, and customer satisfaction is the key. Inventory management on the other hand makes much of our world today progress in an orderly fashion. In fact, Inventory, accounts receivable, and accounts payable account to $1.1 trillion in assets. That’s about 7% of the US GDP. Every business goes from its manufacturing to distribution goes through a certain chain system, this chain is complicated and handling all it’s component can be very overwhelming. Statistics says that 75% of all supply chain management professionals want to improve their inventory management practices. Hence, we have curated the major inputs and outputs of supply chain management as well as inventory management.
- Input and output: Suppliers
In whatever business you are, you need supplies to maintain your business. This acquisition process should be well managed. This management is looked into by the purchasing manager.
- Role of purchasing managers-: Since inventory can amount to a large percentage of a business’ investment, the purchasing manager plays an important role in ensuring the profitability of a business. They also manage purchasing activities across multiple buying channels and monitor internal activities to safeguard unauthorized buying. There are many tools which help purchasing managers with supply chain as well as inventory management. Easy Post suggests that companies can reap a 25% increase in productivity, a 20% gain in space usage, and a 30% improvement in stock use efficiency if they use integrated order processing for their inventory system.
- Maintain a demand and supply balance-: It’s very important to gain an accurate view of future demand with sales trend analysis. Its result will help you to predict buying and production needs, reduce out of stock and overstock situations, and minimize inventory investment overall.
- Sourcing and supplier management-: according to BCI, 26.9% of companies will keep inventory levels the same but will be changing supplier base. It is because supplier selection and performance directly relate to the profitability and viability of the business. Therefore, it’s important to evaluate the supplier’s expectation every once a while and monitor supplier performance very closely.
2. Input and output: In the business.
When you have taken care of the supplier in the chain process and purchasing has been done it’s time for management inside the core of your business.
- Receive the inventory-: According to logility, 36% of supply chain professionals say that one of the top drivers of their analytics initiative is the optimization of inventory management to balance supply and demand. It’s important that the inventory should be received either manually or directly through use of a wireless device. This ensures the purchase order details, the invoice details and the receiving details match and changes are made as appropriate.
- Transferring of inventory-: Whenever inventory is moved to a new location within a warehouse or from a warehouse to another location, such as a delivery truck, or between warehouses within a company the inventory should be transferred properly to maintain a proper communication between the components of the supply chain and inventory management.
3. Inputs and output: Customers.
It’s obvious that high customer satisfaction begins with selling to them via their preferred channel, which requires a supply chain and inventory management system that can seamlessly accommodate multiple sales channels.
- Ecommerce: – eCommerce has managed to become an issue when the inputs exceed the capacity for a business to handle them effectively. The automation has become important for every big business, from orders to tracking information and product availability to customers satisfaction everything is managed through various tools. However, 46% of small businesses use don’t track their inventory or don’t have an automated method to track it.
- EDI-: EDI solutions deliver an overall seamlessly integrated and automated solution that connects to hundreds of EDI trading partners. Transactions are automated eliminating re-keying, reducing errors, and complying with customer EDI requirements. Therefore, it’s very important in supply management and inventory management. In fact, according to Logistics Bureau, only 22% of companies have a proactive supply chain network.
- Direct sales-: It’s important to cover the direct sale process from quote to sales order – inside the office, at the retail counter and in the field.
- Customer fulfilment-: Customer service should be at the centre of your business, ensuring high-quality, consistent customer interactions across all business channels and the key to consistent, fast communication is consolidating all orders into one system, where order fulfilment and customer service across the organization can be handled. This can be done with inventory management very well.
According to Zippa, 57% of companies believe that supply chain management gives them a competitive edge and Reducing supply chain costs from 9% to 4% can double profits. for most businesses establish a customer-oriented culture is essential and this can only be done with proper supply chain management and inventory as data is the key to know what your customers need and want. Making sure that these inputs and outputs are all looked after throughout the business process will definitely make your business a success!