Visibility into inventory is a critical component of supply chain resilience. Without it, businesses are less likely to predict consumer demand and plan accordingly, which can cause excess and lost inventory. As manufacturers work to ensure the health and well-being of their employees while still meeting consumer needs during the COVID-19 pandemic, they must take stock of their current processes and find ways to use data to provide visibility into inventory levels in real-time. Here are three ways that manufacturers can improve visibility in their supply chains.
The Role of Inventory Visibility
Inventory visibility is a crucial component of supply chain resilience. It provides the ability to quickly adapt to change, reduce costs, improve customer satisfaction, and help improve safety and security.
Inventory visibility improves supply chain resilience by:
• Enabling faster response times for customers and suppliers
• Reducing possible loss from lack of inventory visibility
• Enabling an organization to fulfil customer demand faster with less stress on their own supply chain infrastructure
Improving Demand Forecasting
Demand forecasting is a crucial component of any supply chain. It refers to the task of predicting future customer demand, which can be difficult because it depends on so many factors: market conditions, competitor activity, external events and more.
Using a data-driven approach to building your forecast will give you much better results than relying on intuition alone. For example, using machine learning algorithms and historical sales data can help determine what drivers have most influenced past sales patterns—and therefore predict future ones based on similar trends. The result is an accurate demand forecast that helps you meet customer needs with less stock in inventory at risk of becoming obsolete or obsolete before it’s sold.
Additionally, by implementing a methodical process for reviewing and updating your existing forecasts (e.g., monthly), you’ll have greater visibility into changes in market conditions over time so that you don’t miss out on opportunities for improved performance or unexpected problems that may arise from sudden shifts in demand levels or other factors outside your control
Building Healthy Relationships with Suppliers
To build supply chain resilience and avoid the negative impact of COVID-19, it is important to build healthy relationships with your suppliers. Your suppliers can help you in a crisis—for example, by shipping products from their facilities which are not impacted by the disease. In addition, they can help plan for future crises. They could also advise you about new technologies or product launches that will improve your business’s resiliency in such situations.
Inventory visibility, COVID-19, supply chain resilience
Inventory visibility is a core supply chain function that enables adherence to compliance, efficiency and agility.
Compliance: Inventory visibility helps companies comply with legal requirements such as the U.S. Drug Supply Chain Security Act (DSCSA) and Good Distribution Practice (GDP). These mandates require tracking of prescription drugs from manufacturer to patient, making it critical for pharmaceutical manufacturers to maintain accurate records and apply rules governing access/use of information.
Efficiency: A lack of transparency in assets can lead to inventory misallocation across the supply chain inefficiencies that impact time-to-market and cost of goods sold (COGS). For example, inadequate visibility into stale or excess inventory impacts cash flow by increasing obsolescence risk which must be priced into COGS even though it cannot be sold at full price because its shelf life has expired. Additionally, an inability to determine where components are stored can result in significant delays when trying to get parts quickly during a manufacturing crisis as they may not be readily available within close proximity due to poor location planning ahead of time.”
The COVID-19 pandemic has brought a host of challenges for businesses in every industry, and supply chains are no exception. The need to move inventory at a moment’s notice has made it more important than ever that manufacturers have full visibility over their stock. This helps with demand forecasting and building the healthy relationships necessary for the modern supply chain to run smoothly. Even with these tools in place though, companies still need to stay compliant with international laws and regulations if they want their supply chains to continue running without interruption during these trying times.