Page 12 - Logistics News - Issue 02 - 2024

INVENT O R Y MAN A GEMENT

20 inventory management strategies

to improve stock efficiency

Contributed by Netstock, www.netstock.com

Discover the top 20 types of inventory management strategies, their significance and why implementing
them is crucial for businesses.

n modern business, inventory management strategies 3. Minimising stock-outs and overstock situations
have become exceedingly important in helping ensure When you run a business, being able to minimise stock-outs and
I operational efficiency, customer satisfaction and financial reduce excess stock is crucial for maintaining optimal inventory
success, making them a marker of business success. That is levels. Using some of the top stock management strategies, you
why businesses across industries constantly seek to discover can effectively mitigate these risks.
methods for inventory management that optimise their stock
levels and streamline their supply chain operations, offering a 4. Enhancing customer satisfaction
path to greater success. Customer-based inventory management strategies lead to greater
customer satisfaction and loyalty via timely order fulfilment and
In simplest terms, an inventory management strategy product availability, ultimately driving business growth and success.
refers to a set of practices that aid in planning and overseeing
inventory procurement, management and utilisation. 5. Streamlining operations
Additionally, an operations strategy for inventory management By using technology and data analytics in inventory management
ensures that these processes are executed by maximising strategies, businesses can streamline processes and use resources
efficiency and minimising costs, allowing the business to make more efficiently, helping them become more agile and competitive.
informed decisions regarding replenishment cycles, stock levels
and supply chain optimisation. 20 inventory management strategies
1. Demand planning
Why implement an inventory management Demand planning is an operations strategy for inventory
strategy? management that involves forecasting future customer demand
Implementing effective inventory management strategies for products or services, which then helps businesses anticipate
becomes necessary if the business wants to achieve demand accurately and optimise inventory levels.
operational excellence, maintain competitiveness and meet the
ever-changing demands of the market. Inventory management By incorporating demand planning into their toolkit, businesses
strategies provide the following five benefits: can minimise stock-outs, reduce excess inventory and improve
overall inventory turnover. For example, in retail inventory
1. Cost reduction and efficiency improvement management, demand planning accurately predicts the level of
Having an optimised methodology for inventory management inventory required for seasonal products.
helps a company minimise carrying costs, reduce the risk of
stock-outs and streamline supply chain operations. This, in Pros:
turn, enhances the business’s overall cost-effectiveness and • Enhanced customer satisfaction.
operational structure. • Optimised inventory levels.
• Improved resource allocation.
2. Optimising inventory levels Cons:
With methods for inventory management, such as demand • Reliance on accurate demand forecasts.
forecasting and inventory optimisation, businesses can also • Potential for forecasting errors.
maintain an optimal level of inventory that aligns with demand,
which will minimise excess inventory and maximise the 2. Inventory optimisation
utilisation of resources. Inventory optimisation involves determining the optimal levels of

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