Here is a good read from an inventory perspective by Lisa Wirthman on Forbes.com.
From surf wear to Chinese food, innovations in inventory management are helping businesses reduce their bottom lines.
Companies looking to streamline their supply chains often overlook the costs of the inventory they carry. Inventory can range from raw materials to finished goods to anything in-between.
What’s in Stock?
A broad inventory is critical to the success of companies like Elk Creek Forest Products, a small lumber mill in Independence, Ore., looking to fill a niche in specialty lumber. Elk Creek buys wood from sawmills and reprocesses it into custom-sized beams used mostly in high-end homes and commercial buildings.
Elk Creek’s distribution yard is stocked with over 3 million board feet of lumber, according to its website. The strength of Elk Creek’s varied inventory enables the company to quickly assemble and ship custom orders to contractors across the country.
Finding a Balance
For companies like Elk Creek, efficient inventory management is critical. Keeping too much inventory can use up needed capital and reduce profits. Over time, products can depreciate, get damaged or become obsolete.
On the other hand, too little inventory can cause companies to lose sales, and even customers. The best gauge of how much to order is the amount you’ve consistently sold in the past, reported Lisa Girard for Entrepreneur. Companies also need to consider seasonality, like a fourth quarter spike in holiday sales, when placing orders.
Tracking Egg Rolls
To find the right inventory balance, Chung’s Gourmet Foods, a Houston-based maker of egg rolls, pot stickers, and other Asian entrees, turned to Fishbowl Inventory software. The technology enabled Chung’s to automate and manage the production, distribution, and inventory management of the goods it sells to grocers nationwide.
The software gives all employees access to the same purchase orders, automatically verifies shipments, and helps the company identify items near the end of their respective shelf lives. Properly rotating inventory will save thousands of dollars annually, the company said.
Centralized Surfwear
Companies can also eliminate unnecessary inventory by streamlining inter-company ordering, wrote Malcolm Wheatley for Procurement Leaders Executive Network.
Santa Cruz, Calif.-based O’Neill surfwear company has grown tremendously since it opened its first surf shop in 1952. In Europe, O’Neill was working with 34 different distributors and up to 50 different platforms — a huge logistical challenge that often resulted in lost sales.
“Making sure the right product was shipped to the right customer at the right time was almost impossible to forecast,” said Richard van der Hoek, integrations manager for O’Neill Europe.
To fix the problem, O’Neill created a centralized system for order tracking by installing Liaison Technologies’ Electronic Commerce Server, and switching to a single warehouse to hold all its European stock.
O’Neill now receives shipping information when goods leave the factory, enabling the company to catch delivery mistakes faster, and keep customers informed of delays, van der Hoek said.
Companies looking to streamline supply chains should look no further than their storage shelves, where innovations in inventory management can increase efficiency, and reduce long-term costs.
No comments:
Post a Comment