Inventory is a crucial ingredient to any business within the supply chain and we all know that inventory levels of raw materials, semi-finished goods, or finished goods need to be effectively managed to control inventory costs.
But, even though there is this basic understanding of what inventory is in business, the company’s various role players keep bumping heads as to how inventory should be planned and managed. They all have their agendas, wants, and needs.
In this article:
The infographic below shows the various role players and their responsibility to inventory
If you can’t stand the heat, get out of the kitchen
It can get pretty hot in the inventory planning kitchen when all role players have their own opinions on how inventory should be managed. So, how do you get a consensus? The only way to get all role players on the same page of the recipe book is to draw the focus to the ONE common denominator that all role players have in common – the customer. And this is where another C-word comes into play – communication!
Regular collaboration between departments is key to ensure that all involved are on the same page. An important part of that collaboration should be the analysis of data – the data within your business and warehouse should be facilitating key decisions between the various stakeholders. Remember: data is not the be-all and end-all – there may well be other insights worth taking into consideration, and that’s where this collaborative process will really shine. In the instance where there is no data, allow the station chef with the expertise in whatever area is being discussed to lead the way. For example, your company is launching a new product, unlike anything you have had before. There will be no previous sales history to look at, so in this case, your marketing person would have done some research and would potentially have market-related data to consider. Your sales would have tested the waters with a few customers to determine some level of acceptance and popularity around this new product. So in this instance, the opinions of these two role players should override that of the finance or inventory planning person.
The proof is in the pudding
A kitchen fitted with the right tools and equipment is off to a better start in preparing excellent meals than an ill-equipped one. The same applies to successful inventory management. If you have an effective inventory management tool that allows you to base decisions using data insights, you are off to a good start.
