Risk and Inventory Optimisation

Inventory management and really inventory optimisation are one of the most critical operational activities that determine the success or failure of any business. Which is why I guess companies are turning to inventory optimisation software that Induendi. Whether it’s a neighbourhood bakery keeping enough doughnuts on hand for the local office workers nearby or a multinational retailer ordering cargo containers full of merchandise from an overseas supplier, the fundamental issues and challenges are much the same when it comes to inventory management and inventory optimisation.

Risk and Inventory Optimisation

Maintaining enough of any inventory is hard enough without trying to ensure you actually have the optimal levels of inventory. Inventory optimisation is a challenging process and one that requires constant vigilance with, we believe, inventory optimisation software.

Inventory optimisation requires the right level of inventory — enough, but not too much — can produce happy customers, brisk sales, and an optimal capital cost structure. The wrong level of inventory can lead to logistical chaos, lost sales and lower profits, hence why the need and demand for inventory optimisation software!

So while it is clear that inventory optimisation and inventory optimisation software main focus could be on cost and increasing profits one should not forget that risk is an increasingly important factor in inventory management and inventory optimisation. In a recent survey of supply chain executives conducted by the IBM Institute for Business Value, 60 per cent of the executives surveyed identified risk as a significant or very significant challenge.

The leaner the supply chain, the higher the risk of disruption. And as supply chains have become more globalised and interdependent, threats ranging from an unexpected rise in fuel costs to weather or even political upheaval can have significant implications for inventory management and a negative impact on inventory optimisation.

Reliance on too few suppliers poses a risk, as does the distance from those suppliers. More recently, environmental sustainability has become a supply chain risk factor. “Green” business practices, or the lack of them, can seriously affect relationships with customers.

A supplier with a poor record on any number of environmental or labour issues can taint the image of a brand — sometimes overnight — through an unflattering news report or social media, and inventory is ultimately affected. Can you see where this is going, there is always the need to stay ahead and what is the best way to do that? Of course with inventory optimisation software like that from Intuendi!

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August 8, 2018 - intuendi