Import/Export Operations’ Post

Steps to align inventory in accordance to the trends predicted.

The importance of inventory turnover in the supply chain. 🔄 Inventory turnover is the metric that quantifies the number of times a company sells and replaces its #inventory over a period of time, usually a year. It is calculated by dividing the cost of goods sold by the average inventory during the period. 📊 This #KPI is of great use in supply chain management: it allows us to adjust #stock levels, helps in reducing operating costs and is closely linked to demand planning. Want to know more about this indicator?👇🏻

One of the biggest problems in Supply Chain Planning is Excess inventory, it is a common problem for several reasons: 1️⃣ Inaccurate Demand Forecasting: Overestimation: Businesses often overestimate future demand, leading to overproduction or over-ordering. Market Shifts: Sudden changes in customer preferences, economic trends, or competitor actions can leave businesses with unexpected excess stock. Poor Data: Outdated or unreliable sales data can lead to inaccurate forecasting and excess inventory. 2️⃣ Supply Chain Inefficiencies: Long Lead Times: If it takes a long time to receive orders, businesses may overstock to compensate, leading to excess inventory if demand drops. Minimum Order Quantities (MOQs): Suppliers often require businesses to purchase a minimum quantity, which can exceed immediate needs. Disruptions: Supply chain disruptions (e.g., delays, shortages) can result in over-ordering to ensure stock availability. 3️⃣ Promotional and Sales Issues: Unsuccessful Promotions: If promotions don't generate the expected sales boost, businesses may be left with surplus inventory. Optimistic Ordering: Over-ordering in anticipation of sales or discounts can backfire if demand doesn't materialize. 4️⃣ Product-Related Factors: Seasonality: Seasonal products may have leftover stock outside their peak sales period. Short Lifecycles: Products like technology or fashion items can quickly become obsolete, leaving surplus inventory. Quality Issues: Defective or unpopular products may contribute to excess stock. ⚠ The Consequences of Excess Inventory ⚠ Tied-up Capital: Money spent on excess inventory could be better used elsewhere. Increased Storage Costs: Warehousing excess stock leads to higher holding costs. Obsolescence: Products may become outdated or expire. Markdown Pressures: Businesses may need to sell at a loss to clear excess inventory. Read this PDF we have prepared to guide you on how to avoid it. Or you can use our Inventory Optimization Tool to avoid this issue Inventory https://lnkd.in/din3wUfG How much Excess Inventory are you Currently Carrying? #excessinventory #excessstock

Do you need more inventory? Almost certainly yes. And no. Inventory optimization is too often used as a euphemism for inventory reduction. And inventory reduction is too often perceived as risking increased shortages. However, the empirical data suggests that companies which struggle with shortages frequently have high overall inventory levels, while many companies with lean inventories don't necessarily have more shortages. The reality is that well managed supply chains maintain inventories at levels that avoid shortages and excesses simultaneously. Manufacturing capacity, working capital, even warehouse space, are not unlimited resources, so overproducing unneeded inventory can and does create shortages of needed inventory. So by all means increase your inventory. Just make sure it's the right inventory. And a good way of doing that might be by reducing your (unneeded) inventory. Welcome to inventory optimization. #inventoryoptimization #inventorymanagement #supplychain #workingcapital

One of the biggest problems in Supply Chain Planning is Excess inventory, it is a common problem for several reasons: 1️⃣ Inaccurate Demand Forecasting: Overestimation: Businesses often overestimate future demand, leading to overproduction or over-ordering. Market Shifts: Sudden changes in customer preferences, economic trends, or competitor actions can leave businesses with unexpected excess stock. Poor Data: Outdated or unreliable sales data can lead to inaccurate forecasting and excess inventory. 2️⃣ Supply Chain Inefficiencies: Long Lead Times: If it takes a long time to receive orders, businesses may overstock to compensate, leading to excess inventory if demand drops. Minimum Order Quantities (MOQs): Suppliers often require businesses to purchase a minimum quantity, which can exceed immediate needs. Disruptions: Supply chain disruptions (e.g., delays, shortages) can result in over-ordering to ensure stock availability. 3️⃣ Promotional and Sales Issues: Unsuccessful Promotions: If promotions don't generate the expected sales boost, businesses may be left with surplus inventory. Optimistic Ordering: Over-ordering in anticipation of sales or discounts can backfire if demand doesn't materialize. 4️⃣ Product-Related Factors: Seasonality: Seasonal products may have leftover stock outside their peak sales period. Short Lifecycles: Products like technology or fashion items can quickly become obsolete, leaving surplus inventory. Quality Issues: Defective or unpopular products may contribute to excess stock. ⚠ The Consequences of Excess Inventory ⚠ Tied-up Capital: Money spent on excess inventory could be better used elsewhere. Increased Storage Costs: Warehousing excess stock leads to higher holding costs. Obsolescence: Products may become outdated or expire. Markdown Pressures: Businesses may need to sell at a loss to clear excess inventory. Read this PDF we have prepared to guide you on how to avoid it. How much Excess Inventory are you Currently Carrying? #excessinventory #excessstock

Tired of riding the waves of inventory issues? Say goodbye to the bullwhip effect! https://lnkd.in/eUMrMsT7 By implementing demand forecasting and collaborating with suppliers, you can eliminate misinformation and improve your fill rates. #SupplyChainManagement #DemandForecasting

Let’s talk about supply chain dynamics as inventory management is a key component of sound management. Specifically, the bullwhip effect and inventory accelerator. Traditionally, the bullwhip effect has been used to explain changes in inventory levels. However, there is an argument that the inventory accelerator offers a more accurate explanation. This is because it explains how changes in demand can lead to changes in inventory. For example, the surge in demand for building materials during the pandemic is an illustration of the inventory accelerator at work. #thefreightarchitects #jaguarfreight #logistics

Let’s talk about supply chain dynamics as inventory management is a key component of sound management. Specifically, the bullwhip effect and inventory accelerator. Traditionally, the bullwhip effect has been used to explain changes in inventory levels. However, there is an argument that the inventory accelerator offers a more accurate explanation. This is because it explains how changes in demand can lead to changes in inventory. For example, the surge in demand for building materials during the pandemic is an illustration of the inventory accelerator at work. #thefreightarchitects #jaguarfreight #logistics

Let’s talk about supply chain dynamics as inventory management is a key component of sound management. Specifically, the bullwhip effect and inventory accelerator. Traditionally, the bullwhip effect has been used to explain changes in inventory levels. However, there is an argument that the inventory accelerator offers a more accurate explanation. This is because it explains how changes in demand can lead to changes in inventory. For example, the surge in demand for building materials during the pandemic is an illustration of the inventory accelerator at work. #thefreightarchitects #jaguarfreight #logistics

Let’s talk about supply chain dynamics as inventory management is a key component of sound management. Specifically, the bullwhip effect and inventory accelerator. Traditionally, the bullwhip effect has been used to explain changes in inventory levels. However, there is an argument that the inventory accelerator offers a more accurate explanation. This is because it explains how changes in demand can lead to changes in inventory. For example, the surge in demand for building materials during the pandemic is an illustration of the inventory accelerator at work. #thefreightarchitects #jaguarfreight #logistics