Inventory Management Techniques That’ll Help You Drive Profitability
For most businesses today, inventory turns out to be the single largest investment, which means getting the most out of this investment is crucial for success. However, one must not forget the fact that optimizing inventory in an omnichannel environment presents a whole new set of predicaments for players across industries. Though the promise of sell anywhere, fulfill anywhere business models are encouraging businesses to leverage smarter, data-driven strategies to enhance service levels, they fail at analyzing the strategies before implementation, which is crucial from an inventory management perspective.
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Our experts have listed a few inventory management techniques that’ll help you save money regardless of the system you use or strategy you follow.
- Adopt a First-In-First-Out (FIFO) system
- Focus on contingency planning
- Set par levels for each product category
- Leverage ABC analysis to prioritize inventory management
- Consider using the dropship business model
The pharma industry, like the other sectors, has gone through periods of intensive technological developments followed by advancements in manufacturing and inventory management. As such, pharmaceutical companies must deploy advanced supply chain and inventory management systems to skilfully tackle market disruptions and fluctuations in customer demands. Also, with businesses recognizing inventory management as a way of generating real value, rather than merely ensuring supplies at the right time, there is a growing focus on analytics and advanced technologies that revolve around supply chain optimization, inventory management, and working capital management.
In this case, a Canadian pharmaceutical manufacturer’s inventory management system proved to be inefficient in handling diverse data sets and failed to correlate multiple data sources systematically to provide rapid insights into inventory levels and supply chain events in real-time.
When it comes to supply chain management, who better than an expert can guide you. Contact our analytics experts for more insights.
The client- a leading pharmaceuticals manufacturer faced several challenges due to the diverse and siloed nature of their supply chain and inventory data. They further realized that the global pharma market was at a new inflection point with several transformative technologies reaching a level of maturity, universality, and affordability that have made them useful for and in fact, necessary for supply chain organizations to thrive in a competitive scenario.
The company’s supply chain leaders specifically recognized that improvements in inventory management could help improve its performance and agility in terms of recognizing, managing, and mitigating supply chain disruptions which were a major area of concern for the organization.
The client approached Quantzig as they wanted to gain better clarity and analyze the connection between demand forecasting and inventory management at an organizational and technological level to better plan, predict, and meet market demands. To help them address their challenges, our experts leveraged advanced supply chain analytics methodologies to collate, analyze, and correlate inventory data sets from across disparate sources, silos, and systems and offered real-time insights based on the interpretation of those data sets. Unprecedented visibility into previously unavailable ‘dark’ data greatly augmented demand-supply intelligence and helped the client to enhance their approach to inventory management.
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The first phase of this inventory management engagement revolved around leveraging Quanatig’s advanced inventory management solutions to correlate and assimilate data from various sources to provide comprehensive visibility into inventory processes. The inventory management solutions not only helped the company to gain better visibility into market needs but also helped them improve speed and agility by lowering inventory levels and working capital. Though inventory management solutions offered were complex, the use of advanced analytics and statistical techniques to complement existing solutions with demand-supply predictions, offered a strategic advantage for the organization.
Once our supply chain analytics experts adapted and learned more about the company’s inventory management systems, further value was derived by leveraging the predictive capabilities of the inventory management system. This helped them to accurately forecast demand and inventory levels and anticipate possible disruptions to determine the best course of remediation and action, including the identification and replacement of suppliers and delivery options.
Quantzig’s inventory management solutions also enabled the pharma company to:
- Realize a 33% reduction in inventory levels by freeing up a significant sum of their working capital
- Establish a single source for all inventory data and reports, reducing manual workload, improving visibility, and delivering deeper analytic and cognitive insights
- Achieve a 3.5% reduction in working capital which was directly proportional to their inventory savings