There are several common challenges associated with inventory management. Most of these issues stem from problems that arise when forecasting supply and demand, especially as international markets continue to fluctuate. Increasingly, global supply chains are pushing organizations to be more precise than ever with their inventory and product lifecycle management.
Let’s take a look at three different industries and see how inventory management becomes a challenge for each:
1. Retail
It’s obvious that the retail organizations need to keep an eye on their inventories. Supply and demand fluctuations have to be accounted for when determining how much inventory to keep on hand. Supply & Demand Chain Executive contributor Jeff Rauscher noted that in order to keep up with the changing retail landscape – product lifecycles are getting shorter and customer demand for ever-faster service is increasing – organizations are turning to consumer technologies like Apple Pay to speed up operations.
The discrete manufacturing industry runs into issues involving demand.
“The new, accelerated retail model means that your organization has to be incredibly fast and completely accurate to keep building that revenue stream,” Rauscher wrote. “Any glitch or stall in your supply chain activities can mean lost sales, customer dissatisfaction and dulled competitive edge.”
2. Discrete manufacturing
In today’s consumer-driven society, build-to-order products are becoming the norm. The discrete manufacturing industry, which handles the production of items like automobiles or computers that can be broken down into their disparate parts, creates made-to-order products. The problem with customizable products, however, is that demand isn’t readily forecastable. According to TechTarget contributor Ann Grackin, one of the biggest challenges for businesses in the discrete manufacturing sector is inventory management because of this issue of demand forecasting.
“The demand for configure-to-order and build-to-order products is inherently variable,” Grackin wrote. “This puts component suppliers at a disadvantage, since they are at a distance from end-markets and therefore often have no visibility into the factors that influence customer demand. This lack of visibility affects their service levels, with specific part or raw material shortages popping up unexpectedly.”
3. High tech
The main challenge within the high-tech industry – the one that informs most decisions made by suppliers down the line – is shortening product lifecycles. Technologies are becoming obsolete at a more accelerated pace than ever before, and it’s up to supply chain managers to know when systems will be outdated and where legacy tech resides so that they can account accordingly. Product lifecycle management and inventory management are closely linked in this arena.
Forecasting solutions from Oracle
Different industries deal with inventory management issues in different ways, but they could all use a partner to help them gain actionable insight from their warehouses and help them better manage supply and demand expectations. For instance, Oracle Global Inventory Management solutions provide visibility into the supply chain – where do materials come from? How many do you need? By drilling down into supply chain and demand data, companies can make educated forecasting decisions.
By accurately determining the future demand for certain products, the lifecycle issues of the retail and high-tech industries and the unknown demand for customizable products in discrete manufacturing can be broken down into these disparate parts. Detailed analysis of key performance indicators can provide the critical insight necessary for warehousing decisions, and inventory reporting and classification tools allow managers to see which products need to be ordered or discontinued from a single screen.
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