The Future of Inventory Management

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This post concludes my inventory management blog series. Throughout this series I’ve proposed an elevated role for the inventory manager that challenges the assumption that an inventory manager is a victim of his colleagues’ business decisions and plays only a limited role in formulating inventory results. Inventory management is not a stand-alone business process that occurs after other processes are complete. It is a high-level process that should be integrated into other supply chain planning processes including, at a minimum, sales and operations planning, master production scheduling and supply action management. Inventory managers should support multiple business objectives and should have business integrated targets related to inventory levels, customer service levels, total inventory cost, and inventory quality. The inventory manager needs to act like an air traffic controller, effectively collaborating with his management peers to guide and coordinate their processes together in a way that leads to optimized inventory results. They should be able to update safety stock and order policy settings, and they should be able to collaborate on improvement initiatives related to lead-time optimization, supply and demand variability, and supply chain agility. It’s important for the inventory manager to have strong analytic skills and a deep understanding of the principles of supply chain management as a successful inventory manager will understand how to meet his targets without negative consequences in other areas of the business. The company should support the inventory manager with access to continuous learning resources and development courses to ensure they stay current and can take advantage of recent industry advancements. The planning system should embrace the complexity of the inventory management process by offering advanced configuration options, but should minimize the complications by providing simple and standardized business processes. The planning system should visualize business goals, predict performance and exceptions, and prescribe realistic resolution options. The inventory manager’s dashboard should help them to understand the complex relationship between multiple business processes, and help them to identify and address high-priority improvement opportunities. The basic daily process for the inventory manager should be to sense the current status of the inventory plan, assess any exceptions or opportunities, formulate a response, recalibrate based on the predicted results and collaborative input, deploy the changes to the planning system, and document any assumptions or notes to learn from the results. The inventory management survey we completed last month highlighted that the inventory manager’s role varies widely from company to company, and that they often only have limited authority to impact their company’s inventory results. How does your inventory manager’s role compare to the one I’ve described here? With that answer in mind, I’ll ask again: Are you getting the most out of your inventory management process? Don’t agree with the role I’ve described here? Are there business goals I’ve missed that the inventory manager should be accountable for? Please share your feedback with me in the comments below.

Interested in learning more about inventory management? Check out the rest of the blogs in this series.



Chuck Intrieri
- July 25, 2015 at 9:53am
Don't take Inventory Records Accuracy for granted: a blog article I wrote:

Effective cycle counting and root cause analysis is the foundation for effective Inventory Management. Cycle counting can also eliminate the need for a physical inventory.
John Salter
- October 07, 2015 at 8:21pm
Very well said! Your's is the first article I've seen to support the idea that a good inventory manager can solve many of a company's inventory himself...if given the tools. The air traffic controller analogy is good and goes to the core of the dove-tailing that is mandatory with sales, production and traffic to make the entire flow work as a seamless unit. There must be a true teamwork effort to make the many variations of product demand, production and eventual ship out go as smoothly as possible. Glad to see someone recognized it.
Stella Robinson
- December 02, 2016 at 6:28am
For any business, management plays a very important role. The broad management section has this inventory part that creates better prospect for the business and needs to be managed with utmost care and expertise. The time was gone when you do the inventory tasks via old machines. Mobile devices replace old machines drastically for inventory management that run an entire inventory control process smoothly.
Andrew Dunbar
- December 16, 2016 at 11:26am
Thanks for the comment Stella. I agree that mobile devices empower the inventory planner to allow them to rapidly respond to new challenges wherever they are (out in the warehouse or at the coffee shop). Their software tools need to empower this behavior.
Frans van Beurden
- June 01, 2017 at 5:44pm
Andrew, Agree with your thoughts and i have met and seen a lot of companies still not able to see inventory management as key role in their supply chain. But it is changing as complexity is growing and "time" is getting shorter, what leads to more attention to inventory management. See how walmart and amazon manage their business. Best way to get buy-in, i have experienced, is to take the CEO, COO or best CFO on the floor and explain what money his company is loosing due to missed sales, bad quality of operations or decreased value of inventory. Not even mentioning the loss of money due to use of more resources than needed
Andrew Dunbar
- June 02, 2017 at 10:53am
Thanks for the feedback Frans. The amount of waste that can be generated by poor inventory management practices can be staggering! I agree with you that you can't solve the problem if you can't raise executive awareness to the impact of the problem. In my past role as a supply chain analyst at an aerospace manufacturer, nothing made the problem more real than a trip out to the shop floor and wiping a thick layer of dust off of thousand dollar components that had been sitting idle for a year or two!

A shop floor tour can really open eyes, but your planning system of record needs to help identify these issues without that trip to the warehouse, and should help you drive improvements across your entire network. With the growing complexity you mentioned, you need a digital solution to optimize your inventory!
joseph darryl
- August 30, 2017 at 2:16am
You provide an excellent information about the Inventory Management System.
- September 15, 2017 at 1:58pm
Hello I am a research scholar on the topic inventory management in Indian steel industry :a comparative analysis between tata steel and sail.will. your blog help me in deeper insight about my topic. Will you cover the topic of inventory management in steel industry.
Inventory Control System Dubai
- March 02, 2018 at 4:23am
Inventory management is moving towards its future.Nice stuff. Thanks for sharing it.
Edward M. Mathis
- May 17, 2018 at 9:18am
How important is an inventory control system for your business? We cannot overemphasize how crucial this software is, and technology, in general, to running your business. Aside from keeping track of your inventory, it has the functionality of notifying you if any item in the inventory is at a dangerously low level and requires replenishing.

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