- 9 March 2017
- Written by: sales-academy
- Categories: E-Learning, Supply Chain
The success of products and services in today’s global marketplace depends on the supply chain capabilities of global corporations. Among these capabilities, an effective inventory control system is required to maintain a sustainable competitive advantage and stay ahead of competition. To increase profitability, companies have to focus on driving forces which generate sales. However, if there is no proper inventory management in place, there is a chance of not being able to meet the consumers’ demand. Such occurrences usually leads to customer dissatisfaction that may potentially lead to a loss in market share, where consequently existing customers might decide to go for a competitor’s service/product.
Inventory control can result into major benefits for an organization. The Inter-American Investment Corporation (IIC) describes the importance of keeping a detailed record of procedures for ordering and receiving a consignment of goods to ensure that enough inventory is being held, that there is no duplication of orders and that quality is maintained. They highlight the fact that control should be focused on the following functions: the ordering of inventories, the purchase of inventories, the receipts of goods into store and storage. A proficient inventory control system leads to numerous advantages for an organization:
- Inventory control protects a company from fluctuations in demand of its products.
- Better services are provided to customers.
- Maintain a smooth flow of materials in continuing production operations.
- The right stock levels are maintained, reducing the risk of making losses.
- It helps to minimize administrative workload, manpower requirement and even labor costs.
- Protects fluctuation in output.
- It helps to make effective use of working capital by avoiding over-stocking.
- It helps to maintain a check on loss materials due to carelessness.
- Facilitates cost accounting activities.
- It avoids duplication in ordering of stocks.
Not having enough inventory means you run the risk of losing sales while having too much inventory can incur a significant amount of costs. Therefore, having an efficient inventory control system is crucial to improve a company’s bottom line. A 2011 survey by Chief supply chain officer insights (CSCO) on supply chain network inventory management indicates that 70% of companies rated themselves as just average or worse in regards to process maturity for managing inventory. This alarming situation shows the need to implement inventory control training and development programs to add value to the business for more opportunities in terms of sales and demand as well as to avoid inventory inefficiencies.
Through such training and development programs, organizations are more likely to understand the essence of inventory control and therefore adopt the most efficient strategies through best practices for optimal outcomes. For instance, the inventory control training and development program at Supply Chain Academy covers all the topics required to master your inventory control strategy through the following course programs: types of inventory, inventory control policies, inventory control methods, inventory classification and sources of inventory errors etc. It is crucial to ensure that the attitudes, skills and mindsets of employees are fully developed to increase productivity. These skills can be greatly enhanced through inventory management training. Some ways in which the training can be beneficial are:
Inventory management training allows the employees to be aware and up-to-date concerning the latest concepts of inventory control. Such trainings allow them to use various tools, including inventory spreadsheets to ensure proper control over inventory tracking, stock management and ordering. Effective inventory control training ensures that staffs are well aligned to the expectations of the management while also taking into consideration the final consumers of the product, making sure that goods are available at the right place and at the right time.
Efficiency in operations
The overall goal of inventory management training is to get rid of inefficiencies within the internal processes in terms of time and financial resources. Through training, employees learn about the necessary inventory skills which allow them to fully understand the importance of inventory control, both to ease operations as well as to work towards the fulfilment of the core objectives of the organization.
Effective use of information, policies and protocols
Role-based training programs on inventory control facilitate the process of information dissemination which ensures that all employees understand the protocols of inventory management. A thorough understanding of the protocols and policies allow staffs to be aligned to the expectations of the organization and increase productivity. Besides, an essential aspect of inventory management is effective use of information. Knowing how to use information allows a manager to know which data to collect, buy or store and which information technology resources to invest in. For instance, an inventory manager can obtain order progress information through tracking technology.
World class training contributes towards the development of positive attitude and better compliance within businesses as employees have all the required information to be effective. Such practices ease inventory analysis since key indicators are well-formulated and it gives a clear picture of the efficiency of the inventory controls. The indicators help the management to make timely decisions on inventory and at the same time emphasize on the key areas that need intervention. Consequently a performing inventory system results in increased turnover, reduced operational costs and ultimately leads to higher profitability.
Maintaining the right balance of stock in the warehouse
High quality stock management training programs allow organizations to maintain the right balance of stock in the warehouse and this can be done through effective inventory control. Not having enough inventories to fill orders might result into losing sales. Constant inventory issues (example: backorders), might drive away customers to other suppliers which certainly affects the company in terms of profitability. If a proper inventory control is maintained with the right stock levels in the warehouse, it would reflect back on customer service, ensuring customer satisfaction. Besides, it is essential to establish an effective warehouse management by taking into consideration the amount of inventories. Too much inventory can trigger losses due to the high risk of goods getting damaged.
Effective inventory management is at the core of supply chain management excellence. Through inventory control training, proper guidance is provided to manage inventories efficiently in terms of stock levels, operations, use of information and policies. This leads to the achievement of world-class inventory management which has the capacity to maximize performance in both financial and customer service arenas. At best, it results into a powerful competitive advantage for an organization.