Getting Started on Inventory Optimization
It’s a “volatile, uncertain, complex, and ambiguous” (aka VUCA) landscape for HVAC businesses. That means additional pressures and challenges for the wholesalers and distributors who serve them. More than ever, there is value in optimizing one’s inventory to stay ahead of the curve.
Indeed, now is the time for building greater agility and responsiveness into one's inventory and supply chain strategies. According to Amber Salley’s article for Distribution Strategy, Optimizing Inventory in the Unpredictable VUCA Era, the process starts by defining the organization’s specific supply chain goals and establishing the benchmarks, milestones, and resources that will guide the transformation.
"This step isn't merely about setting targets," Salley writes. "It's a reflective process that requires understanding the symbiotic relationship between your supply chain's performance and the broader success of your organization. It's about crafting a vision that meets current demands and propels you ahead of the curve in the unpredictable VUCA era."
It is also important to identify your current capabilities and limits, the article continues. This requires honest and in-depth assessments of the organization's current inventory management gameplan and its strengths, weaknesses, and gaps, both regarding your technologies and workforce. These insights are necessary for creating the next step in inventory management, which is creating a strategic roadmap that puts your enhancement plans into action.
“This roadmap is not set in stone,” Salley suggest. “It requires flexibility to adapt as market conditions evolve and new challenges emerge. It’s a living document that guides your journey toward optimized inventory and smarter supply chain decisions, keeping you on course through the unpredictability of the business world.”
Effective roadmaps define and prioritize initiatives that drive significant impact while aligning with business goals and supply chain capabilities. Deciding where to focus first can be overwhelming, but it helps to focus on investments and strategies that will address barriers to productivity (e.g., bottlenecks, inefficiencies, skill gaps) and drive process improvements.
Technology plays a key role in inventory optimization. For this reason, a growing number of warehouse and distribution stakeholders are integrating tools like artificial intelligence (AI) into their warehouse equipment and systems to automate and enhance their day-to-day operations and supply chain activities. Again, it can be
tricky to prioritize inventory management investments, but making decisions based on real-time warehouse data and workforce feedback will point the way.
Canada’s HVAC wholesalers and distributors have proven adept at keeping up with their clients. Still, as demand increases and new complexities enter the equation, there is a benefit to taking stock of your inventory management practices and moving ahead with realistic, calculated, and impactful improvements.
“Dream big, but ground those dreams in the practicalities of your current infrastructure, workforce capabilities and technological tools,” Salley says, adding, “[Inventory optimization] is about recognizing the bridge between where you are and where you want to be — understanding that some ambitions may require a phased approach tempered by budget constraints, market conditions and the readiness of your organization to adapt.”
Read the full article here.
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