Monday, March 19, 2012

JIT/Vendor Managed Inventory vs Customer Ordering

Your retail outlet ordering too much and your other retailers order more just to buffer? Then products become expired or obsolete with time?

A clear approach to reduce waste and capitalize on inventory pooling is to do Just-In-Time (JIT) inventory.

A practical approach to do this is to focus on products that have stable demand first. Do a parallel run to compare what the retailer is ordering vs what JIT will propose by safety and cycle stock analysis. Consider inventory cost saved throgh pooling at a central warehouse, ordering cost, production synchronization cost and space saved. How the space freed at retailer can be used for products that can generate more revenue.

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