Managing inventory has always been a challenge for supply chain. The mistakes committed in the supply chain in terms of wrong forecasting or mismanagement of planning leads either to excess inventory in your supply chain or stock outs. Both the condition of excess inventory or stock finally impacts your financial number in terms of obsolescence cost or loss sales.
The increase in number of SKU’s is further aggravating the problem of inventory management. Today a retailer has hundred thousands SKU store combination where he has to manage his inventory. With information moving at very fast pace creating visibility in your supply chain, problem related to inventory surface out very fast. But the good thing today is tons of data available in your supply chain which can be analysed to make informed decision to manage inventory uncertainties.
Companies are moving from gut based decision making to data driven decision making. Solutions like SAP Supply Chain performance management helps organisation analyse key performance indicators related to inventory like Days of inventory, percentage stock outs, Inventory write-offs, Inventory obsolesce cost, # of active SKU’s etc to keep track of inventory performance. Keeping track of these key performance helps in managing supply chain inventory in a more effective and efficient way.