Our seven-step approach for an effective inventory management process

A systematic approach to inventory optimization determines the true, optimal inventory level with a high degree of precision. Models that reflect the relationships between the relevant variables identify inefficiencies and determine the potential for inventory reduction with great accuracy. Such models can also be used to simulate the impact of changing the variables and constraints to further reduce inventories.

This doesn't mean that operational experience and local knowledge should be ignored. Instead, the best results come from combining the seven-step approach with the experience and expertise of line managers and staff.

Our seven-step approach takes a holistic view of the inventory management process – from forecast through fulfillment:

Supply Chain Strategy

This approach also addresses common challenges that clients face in the forecast-to-fulfillment process and provides proven practices to improve cash, cost and service levels.

Headline Indicators:
  • Inventory Value
  • On-Time in-Full (OTIF)
  • Forecast Accuracy
  • Product Availability
Operational Metrics:
  • Supplier Variability
  • Ageing Inventory
  • SLOBS
  • Forecast Bias
  • Capacity Utilization
  • Life Cycle Management
  • Inventory Integrity
  • Lead-times
  • Adherence to Plan
  • Back Orders

Research Downloads

Optimising Your Inventory is Science, Not Art

Optimal inventory levels can be determined with a high level of precision by taking a systematic and scientific approach to inventory optimisation.

Buffer and Suffer: Why a Good Forecast Beats Safety Stock

Ideally, a forecast prepares you to meet customers demand without leaving a lot of extra inventory in the warehouse. However, because most forecasts are not very reliable, you will probably keep some safety stock on the side. Relying on safety stock proves to be an expensive strategy.

Don't Supersize Your Inventory

How you can prevent letting a new product launch or market entrance Supersize Your Inventory?

Don't Be a Slob: Slow Moving or Obsolete

One of the core concepts of effective inventory management is the trade-off between the levers of cash, cost and service. To apply these levers, a good starting point is an analysis of existing inventory levels.

Stop Doing Make-to-order Reduce Your Stocks by 20%

By introducing selective make-to-stock policies, manufacturers facing unreliable or high changing demand signals manage to decrease inventory while increasing service levels.

Learn More

Contact us today for a complimentary working capital analysis of your inventory management process and take the first step toward releasing more cash from your operations.

Call 1 866 442 2538 to speak with a representative.