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Inventory management has always entailed a series of responsibilities for supply chain managers.
This is because maintaining inventory involves various costs and risks that vary according to the products produced.
For instance, stagnant inventory could signify a production planning error caused by inaccurate demand forecasting, leading to overproduction.
For these and other reasons, adopting good inventory management practices is extremely important.
By implementing intelligent inventory management practices, industries can navigate production cycle uncertainties and track their products from distributor to end consumer.
To learn how to conduct inventory management smartly, follow along in the text below.
The need for effective inventory management
Inventory policies and their challenges have been present since the early days of production on any scale, whether small, medium, or large.
In the case of industrial-scale production, the challenge lies in managing the vast amount of information required to steer production.
An industry with a significant market share will require increasingly accurate production planning to ensure its inventories are satisfactory.
But what does it mean to have satisfactory inventory? In this regard, it's important to remember that maintaining inventory itself isn't the issue, as inventories ensure supply.
However, the challenge lies in planning inventories accurately to avoid overproduction.
On the other hand, inadequate production also harms the industry, as shortages at retail points will require the industry to ramp up production and spend more to satisfy demand adequately.
Despite being an age-old issue, managing the inventories of distributors and retailers remains a critical factor that cannot be overlooked.
Nevertheless, changes and modernizations across various processes can facilitate smoother inventory management throughout all channels of the supply chain.
Members of the production chain are adopting new technologies, reflecting the trend known as Industry 4.0.
Industry 4.0 and inventory management: possible paths
The advent of Industry 4.0 has brought about greater process automation that was previously subject to bureaucratic methodologies and susceptible to human error.
This has enabled actions by industries as well as responses from their sales and distribution channels to become increasingly swift.
When it comes to managing production inventories, changes have been inevitable: traditional supply visits, for instance, though still practiced by some managers, have become increasingly obsolete.
These methods have been supplanted by ERP’s, with their intelligent data management and automation capabilities based on various technologies.
The ever-accelerating dynamics between decision-making and actions by industries pave the way for growing integration among production chain channels. integração crescente entre os canais da cadeia produtiva.
More than entirely disconnected business models, industries, distributors, and retailers now aim for integration to optimize product supply processes.
In doing so, production chain channels eliminate processes that previously consumed precious time, potentially making a difference in product supply.
This integration fosters greater market competitiveness, as better channel integration also provides a competitive edge over competitors.
Building an integration bridge between industries and their channels can occur through various methodologies. However, nowadays, integration is commonly seen facilitated by management software that ensures data transparency.
Facilitating data sharing between industries and their channels optimizes sales and supply processes, and consequently, production rates.
VMI: Vendor Managed Inventory
One of the main issues caused by lack of integration between channels is the loss of resources for both the industry and its channels.
On one side, we have the industry needing to align production with demand. On the other, we have sales channels needing to plan to ensure products are always available for purchase. Do outro, temos os canais de venda que precisam se programar para garantir que produtos estarão sempre disponíveis para a compra.
The lack of alignment between both parties results in a double loss, as supply errors lead to either excess inventory or shortages for consumers.
One way to address this double loss is through the adoption of Vendor Managed Inventory (VMI), where the supplier manages the inventory of the sales channel.
By granting access to various data, the sales channel allows the industry to manage product supply more accurately., permite que a indústria cuide do abastecimento dos produtos de maneira mais assertiva.
This eliminates the bureaucracy of supply orders, thereby optimizing the replenishment process for sales channels.
However, for mutual benefit, transparency must underpin the agreement between the industry and its channels. VMI reduces production delays, but alignment between channels provides the foundation for a smooth process.
Successful implementation of the VMI model also requires managers to adopt tools that align with the industry's objectives.
It's crucial to emphasize that the quality and handling of collected data are highly essential to this model.
In summary, we can understand why so many industries are turning to data science advancements. Solutions based on artificial intelligence ensure process automation and data accuracy, facilitating quick and informed decision-making processes.
Right tools = intelligent inventory management
We've seen that inventory management hinges on various key factors and that poor administration can have negative consequences throughout the production chain.
We've also understood how good inventory management practices are increasingly intertwined with data intelligence processes.
With this in mind, using the right tools will make all the difference in inventory management, whether for industry, distributor channels, or retailers.
Therefore, having tools that provide sell-out data, show product performance directly at POS (Point of Sale), track products in transit, is essential for building effective sales strategies and incentive campaigns that reward the right partners.
Doing this allows you to cut costs while increasing profits, as well as facilitating decision-making as your business grows.
Implanta offers industry-specific solutions with 99.8% accuracy in data collected directly from POS. This ensures you don't rely on erroneous data and avoid wasting resources.
To learn more about Implanta's Distribution Visibility and Demand Forecast solutions and their benefits, speak with one of our specialists.
Having intelligent inventory management also means ensuring control over the production process and fostering more transparent and productive relationships with your channels.
Thus, data collection shifts from being a headache to becoming a powerful strategic management tool, enhancing future growth potentials.
