A well-stocked warehouse ensures high readiness to deliver but entails high logistics costs and tied capital. In contrast, a shortage of stock results in lower costs, but increases the risk of delivery bottlenecks and, thus, jeopardizes customer satisfaction.
Reconciling low inventory levels with consistently high readiness to deliver is the task of effective inventory management. Whilst sounding simple, in practice it presents companies with major challenges:
Inventory Management in Trade & Retail
Wholesale companies face the challenge of responding ever faster to fluctuating demand. Customer service requirements and cost pressure are both on the rise.
Therefore, to ensure sufficient availability while considering cost factors is a core function in technical trade, trade with consumer goods and in retail. Hence, it is essential to ensure an effective inventory management.
Inventory optimization in manufacturing
The most important goal of manufacturing companies is to achieve and maintain high readiness to deliver to the customer, combined with optimized lead times, storage, and resource utilization of production capacities.
However, market-related sales fluctuations, supplier-related risks and a large production depth make efficient materials management more difficult. The assumption that high inventories guarantee for smooth production and a high level of delivery service is still widespread - but in times of increasing cost pressure, it is no longer a viable solution.
Spare parts management is often referred to as the supreme discipline of logistics and plays a crucial role in successful after-sales service. The challenge here is to prevent expensive downtime, while keeping an eye on inventory costs. Sporadic demand for maintenance components that is difficult to predict represents an additional challenge.