What are the best inventory control methods for preventing overstocking?

O excesso de mercadoria, foi inclusive tema da minha conclus?o de pós-gradua??o, como meu nicho de atua??o é voltado a equipamentos, um outsourcing sempre é eficaz, n?o demanda um alto volume de compras e ainda elimina o armazenamento de itens obsoletos. Claro que uma boa análise de dados é útil, gosto muito de estudar a sazonalidade, uma boa base histórica, consegue dar um norte sobre quais meses teremos pico de demanda, sendo necessário inflar o estoque.

Training, training, and training. Typical over stocking comes from poor ordering. The amount of time devoted to ordering must be sufficient to ensure the only those products needed are ordered. A disciplined routine for ordering must be maintained. Look at every 4' section scan the shelf code, is the OOS item being stocked over? Is the inventory on the shelf sufficient until the next delivery? will the shelf hold a full case? Devoting the right amount of training and ordering will deliver great results. Most importantly of which is increased sales. Many companies now use auto replenishment which will place an item for order when the sales for the item reach a specified level through the register. More on this in another post.

In my experience, the following methods are best inventory control methods: 1. accurate forecasting 2. Consistent stock audit 3. ABC analysis 4. Accurate data entry

ABC Analysis is most important. Inventory is like your cash, Forecast and the inventory on the basis of inventory days and plan accordingly. Shedule the alert for aging due and use the FIFO method for inventory out stockings and improve your inventory planning.

ABC analysis with the use of safety stock for each item by its ranking as belonging to ''A''=higher SS, ''B''=lower SS or ''C'' very low or zero SS can help. Of course, depending on the nature of each business other factors can move a specific item up a level regardless of its demand data. For instance such a factor might be its criticality for the operation of a given equipment. If something breaks and puts the equipment out of operation until it is replenished you as the manufacturer must always be able to support the client promptly. But given the vulnerability of any traditional inventory management method to sudden changes in demand, the best way is to install an inventory management software

There are times when you need to carry "safety stock". Preplanning can ensure that you are the go store when a serious situation is developing. Example: Hurricane season. Meet with the local distributors of Ice, water, charcoal etc. In March or April at the latest Guarantee them you will buy all that you commit to and get them to store it in their warehouse until a need arises. If it doesn't simply schedule deliveries to your stores until the inventory is depleted. Do the same in areas prone to serious snow in the winter (replace charcoal with firewood). Demand for these essentials is enormous and can deliver you significant increases in market share. We did this every year at Farm Fresh and saw increases for years to follow

Safety stock is the stock that's kept covering against variations and uncertainties of demand and supply. Demand: covers against forecast error and abnormal demand Supply: covers against supply disruptions. Safety stock has many techniques to be calculated they are all related to either targeted service level using MSD (mean standard deviation) or target of DOS (Days of supply). The most important thing about Safety stock calculation it has to be dynamic and reviewed regularly. for example if an organization has SS of 250 units and the current supplier LT is 3 Months if the LT increased to 5 Months and we didn't review the 250 units of SS we can expect shortage here. New SS = 250 X Square root(New LT / Old LT) = 323

Use the below parameters for calculating safety stock 1. Demand 2. Variation in demand 3. Variation in supply/ lead time 4. Lead time 5. Required service levels 6. No of warehouses 7. Product life cycle stage

Do cycle counting once every three months and compare the value with the inventory books. Work with finance team and warehousing team on how inventory write-off to be done. Make sure that during cycle counting process, inventory delivered at the warehouse long ago should be in valid location in the system and should not show as in-transit. From my experience, it is necessary to involve inventory planner also into the cycle counting process.

Cycle counting is very important for inventory accuracy and control. One of the most effective ways to do cycle counting is using Pareto analysis or ABC analysis to prioritize high moving items. For example if highest moving product is classified as A it would be the most frequently counted product and C products would be the least counted. In other words if the product is not moving enough there’s no reason to count frequently.

I’ve seen the cycle count method work on high-dollar items — through this we were able to keep these items readily available for customers, while reducing the risk for shrink through inaccurate deliveries or theft.

In my experience, cycle counting and safety stock are very important and the best practices to avoid overstocking or vice versa. Weekly, monthly, and quarterly inventories help any company understand the consumption rate of any material and then use the IMS to replenish accordingly.

Periodic cycle counts throughout the year help identify problems as they arise, rather than waiting until the end of the year to resolve all issues. Additionally, it supports more accurate demand planning and purchasing. Continuous reconciliation throughout the year supports a more accurate yearly physical inventory and financial accuracy. The relationship between inventory control and finance is critical.

Supply chain control tower can be helpful in visualizing personalized dashboard, business metrics and E2E transactions. This can help in better inventory control not only by using in-transit and end customer demand but also by factory inventory and planned shipments from supplier.

Es importante considerar el impacto de los parámetros de planeación no optimizados en el alto nivel de inventario requerido, por lo tanto se recomienda hacer trabajo de optimizar estos parámetros y no requerir tanta inversión en Inventarios, ( Parámetros LT, LS, Scrap y SS )

Stocking policy is very important for not only preventing overstocking but also for inventory optimization. For an organization that is operating in finished goods, stocking policy would be MTO (Make to Order) and MTS (Make to Stock) MTS: would be products with high demand and turnover, as they are bought for stock coverage to supply demand (Push System) MTO: would be product with low turnover and highly variable demand or products with very high inventory carrying cost so the organization buy them only when there's demand received from the customer using pull concept. ATO could be even used (Assemble to order) if finished goods have common subassemblies so we stock the components to be assembled upon demand

1. Make sure that during product roll overs to new ones, try depleting old products before shipping new ones. 2. Analyze are we keeping the right product mix in the warehouse. Not using the right product mix results in higher overall inventory at the warehouse and at the same time, stock outs for critical products. 3. Try using satellite storage for big customers which helps in reducing overall inventory and improving service levels.

Demand forecasting: Accurate demand forecasting is crucial to prevent overstocking. By analyzing historical sales data, market trends, and customer behavior, you can estimate future demand more accurately. This helps you plan inventory levels accordingly and avoid excessive stock.