Question

From your experience and by conducting research online explain at least one approach/concept of managing inventory Be sure to mention how you were able to control inventory internally as well as through your supply chain activities.

Answer 1

Take a note…

A very effective method to control and manage inventory is by use of technology ERP solution such as SAP EWM. Such ERP solutions help in giving a holistic view of the product placement and management inside the warehouse. The new ERP solutions have bin management systems which can help in grouping and placing of orders based on customers, delivery models, LIFO/FIFO manner. They also keep track of the inventory moving in and out the warehouse by its integration with RFID scanners. All the inventory can be tracked with RFID within the warehouse. Every shipment that comes from the manufacturing hub will be have a RFID tag on them. These tags will have unique numbers which will be linked with customer orders. When a shipment or group of shipments enter a warehouse, the tags are scanned and entered into the ERP system. The system will automatically allocate storage locations to the incoming inventory. The warehouse teams only have to place the material in the provided location.

After placement of inventory in the marked area, the warehouse manager can effectively control and manage all the inventory within the premises using live dashboards and constant monitoring of the same. When the customers are ready to replenish the material from warehouse, the staff only needs to check the order and system will automatically show the area from which the material has to be picked. This will ensure that the inventory is managed in a FIFO (First In First Out) manner. This will also reduce the aging stock present in the warehouse.

Being part of supply chain team, ensuring the warehouse has adequate stock to manage the uneven demand from customers is a crucial aspect. In such cases, all warehouses have to be optimally used to store the material and move the inventory in and out of the warehouse. If the warehouses are technology enabled and if they use technical solutions to ensure the track the capacity of each warehouse, the materials will not be more than the required one in any supply chain. Before using ERP systems, we used to handle all the inventory records manually. There have been many cases when the ground staff have transferred the last material to the customers rather than following a FIFO manner of working. This increased the ageing stock in the warehouse. Also the manager did not have any view on how much material was present in each section of warehouse. Now ERP system provide on touch reports and using live dashboards all required data can be easily obtained. This has reduced the dependency on manual records and hours spend to recalibrate any wrong reports thereby increasing system efficiency and productivity levels at warehouse.