Global inventory visibility: Why it's needed and how to achieve it


describe the imageOne of the most pressing concerns facing supply chain operations is the need to effectively manage inventory stores and other material resources. Inventory is at the heart of any organization dependent on the sustained functionality of a supply chain network, including businesses as disparate as manufacturers and healthcare providers.

Balancing the flow of inventory and raw materials without investing too much revenue in either can be difficult to achieve without the assistance of a supply chain management software solution, particularly one with global inventory visibility capabilities. This is especially true of enterprises that have expanded their reach into international markets. Maintaining continual oversight across inventory management operations isn't easy for even small businesses with relatively few resources to track, but when operations are extended across the globe, this task becomes even more challenging.

Within these international enterprises, a seemingly trivial delay can have far reaching repercussions down the line, disrupting shipments and deliveries and potentially angering clients. For instance, if an inventory shipment were delayed because a freighter carrying materials ran into a heavy storm, officials would need to act swiftly to line up other options. Under these conditions, an operational delay is almost inevitable, but the length and extent of the ensuing costs can be minimized by addressing the issue head on as soon as it develops. This requires real-time visibility over inventory stores, however.

An IBM report explained that the earlier an organization can get a handle on disruptive supply chain situations, the quicker it can alleviate them and find alternative solutions.

"For intelligent decision-making - and to take the right actions - companies have to know what's happening now," the report stated. "The ability to quickly leverage or build connectivity allows smarter supply chain decisions, timely information and improved exception management."

Legacy solutions often not up to the task
Basic ERP software will typically not suffice for many organizations with expansive and complex supply chains. The need for end-to-end visibility is especially pressing within the manufacturing sector, as these businesses often rely on the availability of raw materials to create and deliver their own goods. In order to ensure that these intricate supply chain networks continue to run optimally and are capable of placing products in the hands of clients within the desired timeframe, businesses will require sophisticated supply chain and warehouse management software.

Writing for MSDynamicsWorld, nChannel vice president Lisa Steinhart explained that upgrading from a traditional ERP package to more comprehensive and sophisticated supply chain management software can improve a company's ability to monitor end-to-end inventory movements. In turn, this will help businesses achieve new levels of production and success.

"If you are relying on your ERP system for inventory and order management, you can only see part of the picture," Steinhart wrote. "What you need is a consolidated view of inventory instead of information scattered across your organization ... Having this complete vision would allow your inventory manager to fulfill orders more intelligently based on which warehouse, store or supplier has the item in stock and even which location is closest to the buyer so that shipping costs can be kept to a minimum."

Solving inventory oversight problems
Installing a comprehensive supply chain management solution can help businesses gain the visibility they need across inventory movement at both a granular and holistic level, offering a wealth of operational benefits:

  • All personnel, from employees on the floor to C-level officers can view inventory statuses in real time, ensuring that the entire enterprise is better synchronized for maximum efficiency and productivity.
  • Inventory shortages can be quickly identified, giving managers a heads-up so they can seek out alternative solutions. This helps businesses keep their delivery promises to clients or consumers even in the event of a shipment delay.
  • Business leaders can clearly compare how much inventory is being stocked versus the number of products actually being moved. This way, they will be able to identify opportunities to reduce unnecessary expenditures without risking running into shortages.
  • Monitoring inventory movement down the entire supply chain will ensure that materials and products get to their destination in a timely manner. Within a large operation with complex global shipping lines, even large pallets may be misplaced or go missing. By keeping a high level of oversight across every step of the supply chain, managers can diligently follow each piece and shipment to reduce the number of lost wares.

In a recent white paper, the Aberdeen Group highlighted the need for state-of-the-art software solutions to achieve optimal inventory visibility in the global supply chain. Settling for ineffective tools will prevent these organizations from fully monitoring their inventory movements and may lead to damaging service delays.

"Gaining visibility requires much more than basic track-and-trace functionality," the report stated. "It involves a control tower approach and closing the loop between planning and execution and synchronization of end-to-end activities - from raw material to the delivery to the end customer. ... Visibility is a prerequisite to supply chain agility and responsiveness."

By investing in supply chain integration tools, businesses can obtain greater visibility and oversight across their inventory systems and ensure that they are optimized to improve the bottom line.

If you liked this article, check out others by Lightwell:

4 ways to make supply chain management more efficient

CFOs: Get involved in supply chain management

The top pressures impacting supply chain management in 2014

Key capabilities for improving supply chain management and avoiding disruptions


Are you optimized for a future of successful SCM?: