Suffering From High Inventory Levels?
Read on to find the three keys solving the challenges that arise from inventory problems
If you are involved in a production or manufacturing business of any kind, then you have probably experienced situations where your product inventory levels were too high or too low.
Inventory challenges can cause painful problems:
- Having low raw material inventory will cause product supply shortages and definitely make an unwanted impact on ongoing production & delivery schedules.
- Having low finished goods inventory will make your business inflexible about meeting ever-changing demand. In extreme situations, you may find yourself constantly falling short of promised supplies.
- Having high raw material or finished goods inventory not only causes unnecessary expenditures and burdens the cashflow, but it also requires expensive storage and stocking that could have been avoided.
What you may not know is that inventory challenges are just a symptom of a larger problem - unoptimized production & supply chain planning. If your production schedules were more evenly matched with the demand requirements, then your raw material and finished product inventory would always lie in a more comfortable level.
The Three Keys To Avoiding Inventory Related SCM Challenges
Fortunately, keeping an eye on these three areas is a timeless answer to meeting inventory related challenges:
- Manage Raw Material Inventory - If you have too much or too little, it will affect your ability to feed your production. So, the key to managing raw materials is to frequently run a Material Requirements Plan. An MRP will calculate how much raw materials you need for a given sales demand.
- Manage Finished Goods Inventory - Too much inventory leads to unnecessary storage requirements and costs. Too little inventory will disrupt your delivery schedule. That's why you need your production schedule to be exactly matched to the raw material supply and sales demand. You should consider deploying an entry level Advanced Planning Solution to see if this helps your situation.
- Coordinate Demand & Production Daily - Most manufacturing planners create plans each week or month because the plans are time-consuming to create & run. But running these plans more frequently has now become easier as more efficient MRP and APS solutions become available and affordable.
We Can Help You With Your Planning & Supply Chain Challenges
Your supply chain problems & inefficiencies stop your whole business from optimal performance - We know, because we've helped diagnose and optimize supply chain issues many times in the past.
To find out more about how we can help depending on your needs, explore some of the important sections of our website below:
Read about Raw Material Planning or Production Planning here |
