Inventory Management Methods in Supply Chain

Inventory Management Methods in Supply Chain

Supply chain inventory management is a collection of methods, means, technologies and operational processes for the purpose of controlling inventory, which is the work of planning, coordinating and controlling the enterprise's inventory. Below I have compiled an article about supply chain inventory management, take a look:

I. Supply Chain and Inventory Management

Inventory management is one of the important elements of supply chain management, it is a collection of methods, means, techniques and operational processes for the purpose of controlling the inventory, it is the work of planning, coordinating and controlling the inventory of the enterprise. and control work.

The goal of inventory management under supply chain management obeys the goal of the whole supply chain, and through planning, organizing, controlling and coordinating the inventory in the whole supply chain, the inventory at each stage is controlled at the minimum, so as to cut the cost of inventory management, reduce the idle and waste of resources, and reduce the overall inventory in the supply chain to the minimum. Compared with traditional inventory management, inventory management under supply chain management is no longer used as a measure to maintain production and sales, but as a balancing mechanism of the supply chain. Through supply chain management, the weak links in enterprise management are eliminated, and the overall balance of the supply chain is realized.

Second, the problems of inventory management in the supply chain

1. Insufficient degree of informationization, the information flow is blocked

Supply chain inventory management emphasizes collaboration and information **** enjoyment, the supply chain node enterprises between the demand forecast, inventory status, production plans and so on are the supply chain inventory management of important data. Enterprises must respond quickly and effectively to customer demand, and must accurately transmit information distributed in the nodes of the supply chain in real time. At present, the information transfer system of many enterprises has not yet been established, and the customer demand information learned by suppliers is often delayed or inaccurate information, therefore, it will bring difficulties to the implementation of short-term production plans. Therefore, how to effectively transfer supply chain inventory management information is to improve the supply chain inventory management performance to be resolved.

2. Uncertainty of the external environment

Inventory control is affected by many uncertainties, such as order lead time, the status of goods transportation, the quality of raw materials, the production process of time demand changes. In order to reduce the impact of uncertainty on inventory control, it is necessary to understand the source of uncertainty and the degree of influence. However, many companies do not carefully study and track the sources and effects of their uncertainties, resulting in the phenomenon that some items are understocked while others are backlogged. At the same time, the company's plan cannot take into account those unpredictable factors, such as: fluctuations in demand due to changes in the marketplace. Unexpected changes in suppliers lead to `out of stock, as well as production interruptions caused by unforeseen events within the enterprise, etc. These uncertainties are the main reasons for the formation of inventory. How to study and track changes in this uncertainty is another challenge to supply chain inventory management.

3. Lack of effective performance evaluation mechanism

Performance evaluation has always been regarded as an integral part of enterprise planning and control. Although in recent years there has been some progress in the study of supply chain management performance evaluation, but there are still many problems, and the supply chain inventory management performance evaluation is even more inadequate. Some enterprises adopt inventory turnover rate as the performance evaluation index of supply chain inventory management without considering the response time and service level to users. Often ignore some other service indicators, such as the total order turnaround time, the average turnaround time, the average delay time, the early delay in delivery time, etc.; Some enterprises use the order fulfillment rate evaluation indicators, but it can not evaluate the level of delay in ordering. Such as the two same only 90% of the order fulfillment rate of the supply chain, in how to quickly replenish the remaining 10% of the order requirements are very different. In addition, because each member enterprise of the supply chain and each department within the enterprise have their own different objectives, not only the inventory management performance evaluation scale is different, but also the indicators used lack of overall consideration. Therefore, how to construct a scientific supply chain inventory management performance evaluation index system and implement it is another challenge for supply chain inventory management.

Third, the supply chain inventory management methods

1. Introduction of information management system, improve the degree of informationization

By increasing the construction of information technology infrastructure, the use of computers, network communications and information technology, such as ERP systems, to speed up the transfer of information, you can achieve the supply chain in the inventory information instant ****. enjoyment. By installing supply chain information technology systems, companies can readily collect and process data and produce according to the system's recommendations. Analysis of relevant data shows that: the use of information technology systems can reduce the company's inventory by fifty percent. For example, by tracking and recording raw materials and finished products at every step of the flow process instantly, so as to achieve the fastest and most direct communication possible between end-users and the upstream nodes of design, purchasing, production and sales, to accurately forecast and quickly judge user demand, to achieve a balance between supply and demand, and to avoid a large number of pressurized or out-of-stock goods. In addition, the collection and handling, processing and transmission of information such as inventory level, demand forecast, production plan, etc. can effectively reduce the inventory cost, which is of great significance for supply chain inventory management. Through the establishment of advanced network technology platform and complete customer database, it makes the customer's demand can be fed back to the supply chain at the first time, which facilitates timely response. With the supply chain information technology system, the information exchange and communication between node enterprises is more convenient. Not only can it improve the degree of information **** enjoyment, but also can make the node enterprises closer to each other, and quickly respond to a variety of uncertainties, so that the entire supply chain inventory management is more accurate and feasible, to achieve the complete communication of information between the members of the enterprise, and can be at any time to the supply chain to feed back the information to the supply chain, coordinated scheduling of the supply chain inventory.

2. Improve the forecasting ability

A remedy to avoid duplication of relevant data in the supply chain is to make the demand information of downstream enterprises available to upstream enterprises. Information ****sharing is the solution to the ? bullwhip effect? s most effective means. Another approach is to bypass rare enterprises to obtain relevant information. For example, the direct sales approach bypasses traditional distribution channels and sells directly to consumers so that the demand pattern for their products can be understood. Since bulk ordering creates a ? bullwhip effect? , companies should adjust their ordering strategy to implement a small-lot, multiple-order purchasing or supply model. Specific measures include: mixed transportation, the use of third-party logistics providers.

Promotions or the practice of evaluating the performance of salespeople purely on the basis of sales volume will cause early purchases, which in turn will cause a decline in future purchases, or disruptions in production scheduling due to a large number of order cancellations. Controlling for early purchases due to the ? Bullwhip effect? The best way to control the bullwhip effect is to reduce the frequency and magnitude of discounts to distributors.

When faced with a shortage of supply, suppliers can limit supply based on a customer's previous sales record, rather than on the quantity ordered, which prevents customers from inflating their order quantities to get more supply. When demand exceeds supply, customers lack information about the manufacturer's supply situation and gaming behavior is easy. Sharing relevant information about production capacity and inventory status with customers*** can alleviate customers' concerns and thus reduce their participation in gaming.　As members of each link in the supply chain set up inventories in terms of guaranteeing service, this accumulation causes a sharp increase in the amount of inventory in the supply chain, which in turn leads to a slowing down of the response of inventory to market fluctuations. Through upstream and downstream enterprises ****share warehouses, reduce the entire supply chain inventory, combined with information ****share, you can effectively reduce the impact of demand fluctuations.

3. Establish a reasonable performance evaluation mechanism

Performance evaluation mechanism is an important part of supply chain management research, but also can be seen as an integral part of enterprise planning and control. The establishment of supply chain management inventory performance assessment mechanism can accurately measure the node enterprise inventory performance and the entire supply chain management inventory performance, it is a reasonable allocation of supply chain benefits of the ruler. At the same time, it can also carry out strict accounting and evaluation of the implementation of supply chain management, thus guiding managers to make effective decisions. In general, comprehensively and scientifically analyzing and evaluating supply chain management inventory performance has become an important management task at present. In the process of logistics node enterprise management inventory, as far as possible to mobilize the initiative and enthusiasm of employees, the establishment of a corresponding reward and punishment system for the continuous optimization of the supply chain inventory management to provide incentives and lasting power to motivate the node enterprises are to create a high level of inventory management performance. In addition, in the supply chain inventory management, on the one hand, it requires cooperation between the node enterprises within the supply chain involved in the storage process, on the other hand, it also requires cooperation with similar enterprises outside of this supply chain as well as the whole society to realize the economic and social benefits of ? *** win?

Supply chain inventory management can regulate the difference between supply and demand, to ensure the normal needs of production and business activities; shorten the lead time for ordering, speed up the market response speed and reduce the impact of uncertainty. Therefore, how to rationally develop the supply chain inventory management is the top priority of logistics management. Inventory management in the scope of the supply chain, the adoption of management methods with innovative ideas (such as VMI, etc.), to overcome the limitations of traditional inventory management, not only to reduce the inventory level of the enterprise, but also reduce the inventory level of other partners, so that the entire supply chain of the lowest level of inventory, the lowest cost of logistics, and enhance the competitiveness of enterprises.