This is the second blog in my series on Inventory Management. You can find the first one ‘Are you getting the most out of your inventory management process?‘ is available here.
Managing inventory can be a challenging job! Inventory managers have to balance multiple conflicting priorities, support multiple internal and external customers, and are typically responsible for millions of dollars spread across multiple sites. They often manage their company’s single largest asset and receive little thanks for their efforts.
Unfortunately, many inventory managers don’t have the tools necessary to meet these responsibilities effectively. Supply chain complexity is increasing as companies find new ways to provide value to their customers. The inventory manager needs tools to exploit this complexity to get the most out of your inventory investment. All too often inventory managers are stuck spending all their time building reports and urgently responding to the latest shortage. They become experts at transferring and reallocating inventory to put out the latest fire, but can’t always track the true impact of their actions on the organization. Training and professional development is often sidelined to maintain focus on daily issues.
As companies increase the maturity of their inventory management process, the role of the inventory manager often evolves. The best planning systems provide users the ability to visualize and plan their inventory, monitor their inventory performance, predict issues before they happen, and prescribe improvements to maximize the benefits of your inventory. Once a plan is set, the system should alert the inventory manager so they can effectively respond where adjustments are required. With the right tools and training the inventory manager can evolve from a firefighter to an air traffic controller and become an expert at manipulating the levers that set a company up for success, not just today, but 3, 6, and 12 months from today.
The inventory manager’s dashboard should provide insight into things like historical, current, and projected inventory levels, customer service levels, predicted shortages, and risk of excess and obsolescence. It should also provide insight into the business processes that impact inventory. For example, excess and obsolete inventory is often the result of things not happening as planned, so the inventory manager needs to understand how well planners are balancing supply with demand and how much variability exists in the demand forecast. This information needs to be provided in a way that provides insight and facilitates collaboration so the inventory manager doesn’t have to rely on that last minute phone call to respond to change. Once the opportunities are identified, the planning system should support analysis, simulation, and collaboration to facilitate intelligent changes to the inventory plan with a complete understanding of the trade-offs involved in each decision.
The inventory management role varies widely between companies. Without a defined inventory manager, responsibility for inventory could fall on master schedulers, demand planners, material planners, buyers, or even finance and business management. We’d like to hear from you. Who manages inventory at your company? What are their goals and responsibilities? How do they collaborate with other groups? Please help us to define this complex role by completing this short survey. I’ll be sharing your feedback over the coming weeks and sharing my thoughts on how to improve the performance of your inventory. Don’t have time for a survey? Share your comments with me below.
Stay tuned for the next blog on the improvement levers available to inventory managers.
Interested in learning more about inventory management? Check out the rest of the blogs in this series.