Advanced Inventory Management

“Information is substituting inventory” is a much-lauded statement in today’s Supply Chain Community discussions. But the information on the non availability of desired goods does not provide much benefit when trying to meet the customer demand.

Inventory Management is one of the “hottest” topics in Supply Chain Management. After describing the relevance of inventory management in today’s supply chains this article outlines important steps towards Inventory Management Excellence with special respect to the role of Inventory Optimization Software.

Today’s chemical Supply Chains are confronted with the challenge to manage complex production operations on the one hand, with rising customer requirements and increasing demand volatility on the other. The easiest way to overcome this dichotomy is to decouple the supply and demand side by using enormous inventory levels. This of course does not lead to a sustainable competitive position in nowadays business environment as the inventory situation of most chemical companies provides an enormous opportunity to reduce asset costs.

Viewing inventory as an enabler in terms of running optimal operations, while providing superior customer service level, is only one part of the coin. Analogically, a pure cost center approach on Inventory Management falls short of the requirements of superior Supply Chain Management (SCM) practices.

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