Supply Chain: Inventory Management Case Study How Do We Reduce Inventory Levels?
I. Major Facts
Warehousing inventory is a major expense, and it is little wonder that supply chain managers are constantly seeking the most effective strategies to optimize supply chain responsiveness while minimizing costs (Song et al., 2021). Effective inventory management in an era of uncertain supply chains, though, requires a delicate balance between fulfilling customer demand, reducing costs, and building resilience to supply chain disruptions (Saputro et al., 2021). Therefore, supply chain managers must continuously adapt and refine their strategies to navigate this challenging inventory management environment as discussed below.
II. Major Problem
In reality, the major problem facing supply chain managers is not the need to reduce inventory, but rather to reduce inventory to optimal levels for the reasons cited above.
III. Possible Solutions
Although every supply chain situation is unique, a growing body of scholarship concerning optimal inventory management practices indicates that there are multiple possible solutions to the above-stated problem, including most especially 1) the creation of cross-functional teams to identify opportunities to reduce excess and obsolete inventory as well as 2) improvements in purchasing, materials management, inventory planning and management. In addition, 3) centralizing the purchase function to receive better...
…less effective than a flexible approach that draws on each individual strategy as the situation dictates, with an overarching focus on the use of the above-described cross-functional teams to maximize the benefits of collective organizational supply chain management expertise.
V. Implementation
Time is of the essence so organizations should begin the implementation process by conducting a thorough assessment of current inventory practices and the performance of purchasing, materials management, and inventory planning functions. Thereafter, the creation of cross-functional teams comprised of experts from various departments should be completed in order to apply holistic problem-solving and to maximize the organization's collective supply chain management…
