Aligning inventory policies throughout the supply chain is crucial for business owners. Often the amount of capital locked in inventory is so substantial that managing inventory flow becomes essential to the survival of the business. Adopting inventory policies or defining them without analysing business requirements is risky and can produce results such as high storage costs, challenges with accessibility and complicated warehouse processes.
3PL providers can assist businesses to analyse their supply chain requirements, and provide the knowledge to help define inventory policies and align them to the needs of their business.
Defining inventory policies
Well-defined inventory policies help to maintain the optimum levels for the fulfilment of orders. The type of supply chain, forecasted demand, procurement, production cycles, government policies, sales forecast and supply chain network are the main factors that a business needs to look at in order to define their inventory policies. With their knowledge and expertise, 3PL providers can assist in defining inventory policies and provide impeccable implementation on the ground.
Warehouse layout plays a vital role in implementing policies such as replenishment cycles, storage methods and economic order quantity. Inventory stock and throughput vary with demand, so outsourcing logistics to 3PL providers in Sydney and Brisbane provide a flexible infrastructure which can assist in aligning your inventory policy to your business.
Appropriate manpower allocation
Determining which skills your business needs in each sector of operations should be part of your inventory policy. Ensuring that the right people are in the right jobs ensures that staff adhere to the performance standards of the business. Even when the demand fluctuates and staff need re-allocation, 3PL providers have the right team of skilled supply chain professionals and ground staff.
Proper information flow
Information flow is one of the main aspects of any supply chain. Information related to sold stock, stock in hand, dead stock, transit-times, production capacity, warehouse capacity, and labour capacity are the main components that assist to define inventory policies. Inefficient and incomplete information flow drives incorrect inventory policies. Collaboration with the right 3PL providers maintains efficient, complete and timely information flow and this brings proper alignment between inventory policies and business needs.
Continuous monitoring and evaluation
Inventory policies shouldn’t be set in stone. They need to adapt to the changing needs of your business. Continuous monitoring should be part of the process to evaluate whether the policies are delivering the desired outcome or not. 3PL providers assist in capturing and analysing data, making sure that your inventory policies remain aligned with business needs.
Defining and following inventory policies that are irrelevant to your business increase business risk. Irrelevant policies are the foremost reason for high stock level, incomplete order fulfilment, process inefficiency and high warehousing costs. Well-established 3PL providers, such as BCR in Australia know the importance of inventory policies and can assist in defining and implementing these policies according to your business requirements.
For more than a century BCR has assisted small, medium and large businesses to achieve an optimum logistics solution with 3PL warehousing, customs clearance, air freight and sea freight services to and from the major ports of including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).