Managing Supply Chain Invevtory

Topics: Supply chain management, Management, Supply chain management terms Pages: 4 (1025 words) Published: April 11, 2014
Managing Supply Chain Inventory

The definition of Management Supply Chain Inventory
Inventory management is the supervision of non-capitalized assets (inventory) and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale.

The benefits of efficient inventory management
Too much inventory is a certain indicator of more serious and costly business process and systems problems that can be rooted very deeply across the organization. They include increasing warehouse area and inventory custody costs, funds sluggish, damaging of the products. Having low inventory might often result in company not being able to meet the committed service levels. Customers will be sent back home without the product they wanted or would be directed to other stores. Efficient management of Inventory has played a vital role in deciding a firm’s ability to operate with good profit margins that is concerned ‘Just in Time’ minimizing the total cost of inventory while maximizing the ability to provide customers with product in a timely manner.

An integrated inventory management -Vendor Managed Inventory By adopting just-in-time inventory practices, companies engage in more integrated supply chain management. Vendor Managed Inventory aims at achieving Zero Inventory. It means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributor’s inventory levels. The manufacturer has access to the distributor’s inventory data and is responsible for generating purchase orders. The manufacturer receives electronic data (usually via EDI or the internet) that tells him the distributor’s sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer...
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