Conventional Inventory Management processes are on the cusp of disruption. We have been leveraging the conventional approach of Inventory Management for almost half a century now. With the advent of Data Science and advances in Technology, now is the time to start thinking about how to take Inventory Management to Inventory Management 4.0. But in order to start thinking in that direction, we first need to understand the Inventory Management process at a high level.
Four steps of Inventory Management Process
Step 1 : Determine the current Inventory position
- What is the current stock on hand and what is currently on order ?
- What is the status of current stock ? Are we overstocked or are we expected any shortages?
Step 2 : Determine the Inventory Target position
- What are the Inventory targets set by the business?
- How can we achieve these targets while satisfying the production and sales requirements?
Step 3 : Develop an Inventory Plan
- What is the proposed position based on Inventory calculations ?
- Is the current analysis effective ?
Step 4 : Implement the Inventory Plan
- Is the Inventory Plan effective ?
- What actions need to be taken to achieve the plan ?
- What are the issues ? What corrections have been made ?
Insights my own