For better or for worse, inventories lie at the bottom of these complex supplychains. The central question of how much inventory is needed, and where it is needed, is often an endless debate among colleagues. Especially when the game of politics drives decisions.

Inventory Done Right
Stocking products is helping companies around the globe to supply their clients on time and provides a buffer against any unforeseen event. Since holding inventory disconnects the production process from the sales process, it allows planners to produce longer production batches decreasing the production costs. In other words, inventory optimization done right reduces overall costs, while optimizing the service level.

Inventory Done Wrong
Nevertheless, holding inventory comes with two drawbacks. The first one is of course its cost: inventory is nothing more than sleeping cash that is depreciating over time. It costs money to store products, and it comes with risks. The more you keep, the higher the cost, and the riskier it gets. Will you really be able to sell all these products? There is always the risk of ending up with dead stock. Keeping less inventory might partially prevent the risk of dead stock, but won’t help to provide adequate service levels to your clients. Actually, in some cases, inventory management is so flawed that supply
chains face both low service levels and dead stock.
 

It is easy to say what is wrong, but it is difficult to make it right. With our Inventory Optimization services, we will build up a model for the inventory, Optimize it by learning the demand supply pattern, then apply the inventory strategy to real business and continue learning it from the live inventory operation.