Inventory Management

73 ways to reduce your Supply Chain Inventory making your organization more profitable and your customers happier

Source: BMS Associates – Ben Schlussel, 2017

Being in a manufacturing, assembling, distribution or repair service function- the inventory mix is the trade-off between smooth operations supporting high service levels and frozen capital accompanied by increased carrying costs. The solution is obvious- inventory optimization.

To achieve this goal, we will be exploring opportunities in Procurement, Shipping and Receiving, Storage, and Production as well as in the planning and inventory transactions.

#1 Include Suppliers in New Product Development & Implementation

By involving your supply partners at the design and early implementation stage of your products, you benefit from package sizes and shape better suited for transportation and storage. This could turn into a powerful space-money saver.


Jan 1, 2018

Proper packing ensures safe operations and no damages or loss of your goods.

The shape and solidity of the packages is not only designed to protect the entirety of the product and its characteristics but also to prevent from damages during handling, transit and storage. The dimensions of the packing boxes should be conceived to help building stable pallets by making optimal use of the area and volume capacity of the standard pallet size and avoid empty spaces and crushing of bottom layers. Consider all your stacking options and use overlapping patterns when choosing to use one or different box sizes. In order to achieve better stability, strength and density of your shipping unit, make sure your boxes are full, with no air in them, distribute weight evenly and avoid overhanging and misalignment when stacking.




Jan 7, 2018

#2 Eliminate “risky” procurement items from NPD&I such as “Sole Source”

At the New Product Development and Introduction stage while supply works with engineering to determine specifications and with operations and finance to meet volumes and frequency of deliveries and reach cost effectiveness, we must recognize the strategic importance of having multiple possible suppliers meeting the technical and quality requirements for critical materials or components. This will provide us with protection against uncertainties of supply, help our contingency planning and will ensure our flexibility in terms of levels of buffer inventory, acquisition cost and availability of substitutes in case of disruptions at our main supplier.


Jan 16, 2018

#3 Reduce supplier lead times

Discussing the reasonable lead times for your business with your vendors could allow them to make adjustments in order to meet your expectations wherever it is possible. In addition, providing your suppliers with an estimate of your future demand would help them to forecast the expected quantities you would order and therefore reduce their lead times to serve you better. From your perspective, the shorter the lead time, the lower level of safety stock you would need for covering demand through lead time. This not only reduces the risk by leaving less time for fluctuations in demand and supply but also drops the inventory holding costs and results in improved profitability.


Jan 23, 2018

#4 Don’t buy parts, buy capacity

Large capital expenditures are difficult to justify and manage especially at early stages of product development and introduction into the market under risky conditions. Instead of owning the equipment or outsourcing the required work, consider the opportunity of renting the equipment in order to meet your manufacturing needs.

This approach will give you a competitive advantage in terms of time, cost and flexibility to adapt to change while you are keeping your significant process know-how under control and retaining your expertise in house.


Feb 5th , 2018

 #5 Enhance information flow, reducing “time”

In today’s dynamic world, reducing the time the information flows translates into time savings, shorter ways for transmitting the message and getting the work done. In the inventory management context, the speed of the communication is important between the distribution center and the purchasing unit as well as between the supplier and the customer. By enhancing the information exchange you are enabling improved cross-functional communications, shorter turnaround times and achievement of win-win results for all parties involved.

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