Advanced inventory management is a process that uses data to make better decisions about inventory. It helps you manage levels and costs, often in conjunction with demand planning. Advanced inventory management can also be used to help forecast demand, reduce excess inventory and even optimize the flow of materials through your supply chain.
An example of advanced inventory management is the implementation of a Just-in-Time (JIT) inventory system. JIT is a strategy aimed at minimizing inventory levels while ensuring that the right items are available when needed. It relies on close coordination between suppliers and the organization to deliver materials or products at the exact time they are required in the production or maintenance process.
Advanced inventory management is a highly specialized field that involves the careful monitoring and control of your inventory. It's important to understand the difference between this concept, demand planning and traditional inventory management.
Demand planning refers to the process of predicting future demand based on historical data and trends. Demand planning helps you determine whether or not you have enough stock on hand in order to meet customer needs at certain times during the year. This type of forecasting isn't suited for short-term fluctuations in demand; however, it'll only give you an idea about what will happen over time (weeks or months).
Advanced inventory management is a way to manage your inventory better than you do today. It's all about balancing supply and demand, which is critical for any business.
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