The modern day inventory manager described in this series is the backbone of your company’s inventory planning process. She has a strong understanding of supply chain fundamentals and is an expert at controlling the key levers impacting the inventory company’s investment in inventory. All that’s left is to add a planning system that enables her to work effectively. If you leave her to build reports and metrics that she needs in excel then she’ll spend all her time crunching numbers instead of planning your company’s largest asset. So, what features should you look for in a good planning system?
- All your data’s in one place. Your planning system should combine all your company’s data in one system. It should be up-to-date (daily at a minimum), and include all the input data required to make your inventory planning decisions.
- Closed Loop. If you don’t execute with your planning system, there should at least be a closed loop between the systems so you don’t spend all your time transcribing after making a decision.
- Built in reporting systems should immediately alert your inventory manager to changes requiring response. Agile response can make all the difference.
- Your inventory manager needs a dashboard that can give her a clear picture of the current status of the inventory plan and provide insight that guides her actions each day. It’s also useful to have more in-depth tools that provide a visual representation of a wide array of metrics simultaneously to help identify concerning trends and improvement opportunities across all the levers in her toolbox. While it can be hard to find time for it, exploratory analysis often pays big dividends.
- I covered this last week, but I really can’t stress enough how important it is to select metrics that support all of your business goals. It’s important that the impact of you planning decisions are visible across all parts of your organization. These metrics should be using live data, and you should instantly see the results of the changes you make.
- Interactive charts and graphs. The metrics on your dashboard should be interactive to enhance their analysis value. You should be able to hover your mouse over charts to read key figures, and you should be able to drill into the details with a single click. Metrics should update immediately when you make changes and you should be able to filter the input data to dig in to areas of concern.
- Hierarchies. Data hierarchies allow you to see your data at various levels of aggregation. Imagine being able to see your metrics at a global, regional, country, or site specific level with a click of the button. Hierarchies can be built into dashboard and reports to allow instant filtering to look at key details.
- What-if scenarios allow you to immediately calculate the results of changes you make so you can evaluate the results before committing the changes to your master data. You can easily lose a whole day if you have to wait for your ERP system to refresh overnight before you can understand the impact of a settings change.
- When you see something wrong in your metrics that requires collaboration, you should be able to quickly send a message to the person responsible for that part. If you’ve created a what-if scenario, you should be able to share that with your colleagues to get their input or buy-in.
- Task flows. Standard business processes save time and can help educate new employees. Many common inventory task are repetitive and best practices should be captured in task flows to maximize the efficiency of these tasks.
The tools described above enable the inventory manager to respond to changes when they happen, not when her phone rings. It allows her to visualize their inventory plan, predict the impacts of her actions, and effectively collaborate with her colleagues. It allows her to redefine the role of the inventory manager and add new value to the company’s bottom line.
Interested in learning more about advanced supply chain systems of record? Check out this blog series by my colleague Carol McIntosh. Stay tuned for the final post of this series on inventory management where I’ll share some results from our recent inventory management survey and share my final thoughts on the role of the modern inventory manager.
Interested in learning more about inventory management? Check out the rest of the blogs in this series.