Inventory management is a topic that can send chills down any supply chain manager's spine. And the bigger the portfolio, the higher the risk. Only a couple of wrong moves in inventory management can send the entire supply chain into a downward spiral. It's kind of like being in a high-stakes game of Tetris where every block is a product that needs to fit perfectly into your customer's hands at just the right time.
Take the case of Hasbro, a major toy importer. During the COVID-19 pandemic, as demand for toys surged with children staying home, Hasbro's sales skyrocketed, and everyone in the company worked hard to meet the demand. However, in 2021, they faced a major challenge on the opposite end of the spectrum. Their inventory managers, perhaps anticipating continued high demand, ordered excessively. This led to a massive increase in inventory arrivals by late 2021, but the sales slowed as the world started reopening. The result? A rapid accumulation of unsold stock into 2022 caused Hasbro to take 64% more days to turn its inventory than in pre-pandemic times. This highlights the delicate balance required in inventory management and the consequences of miscalculations.
For companies that have customer service as their top priority, it's not just about dodging the dreaded 'out of stock' message but about making sure every piece falls into place with style and efficiency.
So, what are the ways to make your inventory management robust and ready for challenges? We will discuss this in this article.
Predictive Analytics: The Power to Control the Future
Imagine having a crystal ball that could tell you what your customers will want, when, and in what quantity. That's predictive analytics in inventory management for you. It sifts through mountains of data—past sales, seasonal trends, even the economy's mood swings—to predict what's going to fly off the shelves. Predictive analytics can turn this data into a superpower, helping you know when to stock up and when to hold back. It's like having a sixth sense for inventory management.
Just the Right Amount: The Goldilocks Principle
The Goldilocks Principle says that everyone prefers having the "just right" amount of anything to having too much or too little. It is often used to describe people's inclinations to choose the middle ground for things like their drink's sweetness, room temperature, task difficulty, and more. Similarly, when managing inventories, there is a sweet spot called 'just right.' Too much, and you're wasting space and impacting cash flow. Too little, and you're sending customers to your competition. The goal is to have just enough to keep the sales rolling without any excess dragging you down. Holocene can help you find that 'just right' level, ensuring you're not the warehouse version of a hoarder or that friend who never has food in the fridge.
Supplier Sync-Up: Your Inventory Partners
Think of your suppliers as partners in the waltz of inventory management. When you're in sync with them, everything flows smoothly. One misstep can land you both on the floor. Integrating suppliers into your inventory system requires sharing information and visibility to keep the supply chain in rhythm. With Holocene, you can create a supply chain that's less like a mosh pit and more like a ballet, elegant and responsive.
Tech to the Rescue: Your Inventory Super Tools
Using the latest tech in inventory management is like swapping a flip phone for the latest folding smartphone. It takes the game to the next level. Automated ordering, real-time tracking, and now AI that predicts demand are the apps and features that can take your inventory game to the next level. The tech, and specifically the AI, can help build the predictive analytics muscle that we discussed earlier. With all the data sitting in the company's ERPs, Planning Tools, WMSs, TMSs, and other systems, it can create a huge competitive advantage in the long term.
Green Inventory: Good for the Planet and the Ledger
Advanced inventory management today also means strategic thinking around green supply chains. This means cutting down on wastage, using resources wisely, and making sure your inventory management practices are sustainable and don't hurt the planet. The supply chain of a typical consumer company results in much higher social and environmental costs as compared to its operations. It is responsible for over 80% of greenhouse gas emissions and over 90% of the impact on air, land, water, biodiversity, and geological resources. Hence, while saving dollars with efficient inventory management practices is important, the community should be given its due respect and focus. This should be a part of the inventory management and overall supply chain strategy.
Holocene: Your Inventory Management Maestro
With Holocene's arsenal of tools, you're not just playing the inventory game; you're playing to win. Holocene's platform gives you a perfect bird's-eye view of your operations, with real-time data and insights that help you make intelligent calls on stock levels.
Think of mastering advanced inventory management like surfing. With Holocene as your surfboard, you can ride the big waves of demand and supply with confidence and grace. It's an ongoing adventure, sure, but with the right tools and attitude, you'll be the one making waves. Reach out today to know how.
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