Inventory Management through Supply Chain

Managing inventory in the supply chain

Introduction

Inventory is termed as to be the lifeblood of supplychain in any organization. If it is managed properly and efficiently it brings greater revenues, profits and growth to the organization. Managing the supply chain is a strategic decision based on plans and policies to be implemented efficiently so to get positive results.The nature of the supply chains never remains the same hence as it changes due to certain factors such as demand, fashion, consumer incomeor others so the policies shall also be changed in accordance with that change.According to a survey of supply chain professionals, organizations are focusing on the flow or distribution of inventory across the supply chains so to make sure about the pace of inventory strategies to be in line with the diversification of supply channels and cater the customers' increased demand(Hugos, 2003).

Optimal inventory management is a cornerstone of logistics management, because this function comes from the correct timing of procurement operations, transport and storage(Fogarty et.al, 1991). Therefore if one may control the inventory levels by shopping consonant with their consumption levels and optimize supply operations, he would achieve a major refresh in cashflow finance. On the other hand, this would indicate that the use of transport would be fully oriented to move items that will soon become current assets (cash) by raising the productivity of their commercial operations and ultimately their storage spaces will benefit in their performance as storage costs decrease as a result of optimum space utilization versus turnover of the stored products. Due to this it can be determined that there is an intrinsic relationship between inventory management and logistics management. In this paper we are going to study different roles of inventory including different types of inventory, distinguish between dependent and independent demand inventory and describe how inventory decisions affect other areas under supply chain(Fogarty et.al, 1991).

Discussion

The success of an organization depends not only onthe management of core business activities but also on relationships and supply chain management. Thus, the top and bottom of the supply chain- a company needs to accomplish relationships with suppliers and customers passionately. The term "management of the supply chain" (SCM / Supply Chain Management) first appeared in the literature in the decade1980s. In the era of1980s, the supply chain management (SCM) began to address the integration of in-stream training materials, from raw materials till the customers end. During the years of 1990s, many industries flourished under very similar fact 'sourcing network' (supply network), 'supply pipeline management '(management of supply channels), supply network chain '(chain of supply networks), supply base management, (Supply Management base), 'value chain management' management of the value chain), 'value stream management' (management flow valuation)(Yeung, 2008). Today, Metz brings a synthetic definition and understandable definition of Supply Chain Management which says, SCM is an approach to manage the product, information and financial transactions across the global sourcing network, the initial supplier to the end customer. The major factors of this definition are Management processes, physical flows ...