Page 16 - Logistics News - Issue 02 - 2024

INVENT O R Y MAN A GEMENT

Pros: • Improved logistics efficiency.
• Real-time inventory visibility. • Reduced carbon footprint.
• Improved accuracy. Cons:
• Enhanced operational efficiency. • Dependency on sufficient demand volume.
Cons: • Potential for inventory holding costs.
• Initial investment in technology.
• Dependency on accurate data entry. 19. Batch tracking
Batch tracking assigns unique identifiers to batches of
16. Minimum order quantity (MOQ) inventory items, therefore tracking their movements through
Minimum order quantity (MOQ) means the lowest possible the supply chain. This lets businesses track products to their
amount of a product that a buyer is willing to purchase or a origins and serve a greater customer satisfaction guarantee via
supplier is willing to sell. Knowing this lets businesses optimise an assurance of quality control, such as for food manufacturers
procurement processes and leverage economies of scale. Such who use batch tracking to trace source ingredients and
a tool is important to retailers, especially those negotiating respond immediately to quality issues/recalls.
MOQs with suppliers for cost-effective procurement and
inventory management. Pros:
• Improved product traceability.
Pros: • Enhanced quality control.
• Cost savings through bulk purchasing. • Regulatory compliance.
• Reduced ordering frequency. Cons:
• Optimised inventory levels. • Initial investment in tracking systems.
Cons: • Complexity in implementation.
• Potential for inventory obsolescence.
• Limited flexibility in ordering. 20. Reorder points
Lastly, we have reorder points, an inventory management
17. Six Sigma and Lean Six Sigma technique that indicates when companies need to order more
These methodologies aim to catch and remove defects, errors stock to avoid running out. This reduces the risk of stock
and inefficiencies in business processes, such as those found in shortages and associated liabilities. Retailers use this strategy
handling processes. This leads to reduced lead times and costs, by supplementing with sales data from previous years and
while also enhancing customer satisfaction through data-driven lead times so that customers don’t miss out on possible
approaches, continuous improvement, employee involvement products.
and their application across diverse industries.
Pros:
Pros: • Automated replenishment.
• Improved process efficiency. • Reduced stock-outs.
• Reduced waste. Cons:
• Enhanced quality. • Dependency on accurate demand forecasts.
Cons: • Potential for overstocking.
• Initial investment in training and implementation.
• Potential for resistance to change. Adopting effective inventory management strategies is
essential for businesses to thrive financially and operationally.
18. Bulk shipping By employing techniques like demand planning, inventory
Bulk shipping allows the transport of larger quantities of goods optimisation and monitoring suppliers and safety stock,
in single shipments, thus allowing for lower per-unit costs businesses can streamline operations, cut costs and keep
compared to smaller shipments. This is one of the best options customers satisfied. These strategies also help unlock cash
for wholesalers who can consolidate multiple orders through that may be tied up in unnecessary or slow-moving stock,
multiple suppliers into a single delivery. freeing up resources for further growth and investment. These
strategies can assist with planning, managing and optimising
Pros: your inventory, leading to sustainable growth in today’s
• Cost savings through economies of scale. competitive marketplace. •

14 NO V E MB E R/D E C E MB E R 2024 www .l o g ist i csn e w s .c o .z a