When Was Your Inventory Strategy Last Updated?

Your marketing team gets a new yearly plan, your sales team has targets that seemingly change by the month, but when was your inventory strategy last updated? While inventory sits at the heart of any business, it's an often overlooked and sometimes unloved process. But that could be changing. In fact, a recent article suggested that 'boards should rethink their inventory strategy and align their whole organisations with it.'‍

Is your inventory managed or managing you?

‍As the piece states, "The main problem is that, in most cases, inventory is not managed. It is merely the by-product of business processes, particularly various supply chain planning processes (S&OP, production scheduling, material requirements planning, etc.) And so frequently you end up with a volume of inventory not because you want that volume of inventory, but because that is how much inventory you have once the effect of all the various processes in your business have netted themselves out."As you can imagine, this leads to inefficiencies. Too much inventory, and you're wasting it, or for tangible items, writing it down to less than cost.Circular reports that the UK's annual waste at the supply level is an eye-watering 4,761 times the weight of the London Eye.

‍Is it time to put inventory at the heart of your supply chain strategy?

‍One bottleneck for a new process is the implementation of the right systems or the fear of doing so. Despite legacy infrastructure, increasing the workload for cybersecurity teams that have to safeguard newly acquired systems while still dealing with old tools that the manufacturer may no longer support, there can be resistance to new ways of working. It feels safer to stick rather than twist.

‍How to get buy-in for a new approach

‍To convince users to adopt new technology, you must first give them a reason. Start by identifying how the latest technology can benefit them and the organisation. You could determine the benefits, from a reduction of administrative time via automating tasks such as invoicing and cross-checking deliveries or a way to streamline operations and eliminate the need for laborious manual reconciliation processes. Here are some other benefits:

‍Cost savings

‍If you can start confirming delivery quantities within one system, you can ensure you only pay for what you receive. Keeping all your price information and history in one place allows you to identify alternative suppliers and costs, enabling informed decision-making and potential savings.

‍Stronger relationships with suppliers

‍Stronger relationships with suppliers are fostered through inventory management systems' efficiency and ease of updating prices and products. Automation expedites processes while enhancing accuracy, resulting in fewer payment delays and stronger partnerships with suppliers.‍

Compliance

‍In addition to financial benefits, enhanced compliance is a crucial advantage of inventory management systems, particularly in the hospitality industry. By meticulously recording product nutrition, calorie, and allergen information, these systems ensure compliance with food labelling legislation, prioritising customer safety and satisfaction.

Overall, the benefits of inventory management extend far beyond mere organisation; they encompass cost savings, strengthened supplier relationships, improved profitability, and enhanced regulatory compliance, making it an indispensable tool for businesses striving for efficiency and success.

‍The next steps

‍Embracing digital technologies means you can unlock new opportunities for innovation, efficiency, and competitiveness.It's time to get everything in order! Orderly can help. Take a look at our case studies for improved supply chain management here or book a demo here.