Successfully optimizing inventory across global supply chains is not possible without the help of inventory management software. The leading solutions are cloud-based and include advanced tools specifically designed to help inventory managers with the complexities of optimization. Inventory management capabilities are sometimes offered as a standalone software solution. More often, they are integrated into a comprehensive end-to-end software solution designed to handle multiple supply chain management functions, including supply planning, demand planning, fulfillment, transportation management, warehousing, customer service, and manufacturing, among others. Inventory optimization in an end-to-end system Many companies find the integrated approach beneficial because it gives them end-to-end visibility across the supply chain and across all the different functional areas. It also gives them the ability to share data in real time to achieve better alignment among the groups and people involved. Armed with this data, the supply chain professionals involved in the optimization process can collaborate more effectively. Like other areas of supply chain, inventory optimization depends on participation from a variety of roles in the organization in addition to inventory managers. For example, while the inventory planner defines ordering policies and minimizes the costs associated with inventory, the material planner manages the detailed plan for all materials, and the distribution planner ensures the availability of stock for the distribution network. When inventory management capabilities are bundled as part of an end-to-end supply chain planning software solution, advanced optimization features and techniques, such as MEIO, can be combined with concurrent planning capabilities to help maximize efficiencies and enhance customer service.
Key inventory optimization activities The leading inventory management software solutions provide deep insight into a company’s inventory position and policies and make it easier for inventory managers to perform the range of activities required to optimize their inventory. Some of these key activities include:
Calculating optimal inventory targets and safety stock settings
Continuously monitoring lead times and changes to parts performance, so policy adjustments can be made as needed
Ensuring inventory is always aligned with the rest of the business through connected, end-to-end management
Improving performance and monitoring changes with inventory quality ratios
Monitoring and understanding trends and exceptions with intuitive, interactive dashboards
Proactively identifying risks and opportunities with visibility into cross-site inventories