Inventory management systems: a guide for businesses in the supply chain
We previously examined how Elders, one of Australia’s leading agribusiness brands, implemented digital connectivity to transform their inventory management, combining stock movement and data management to deliver more efficient transactions for both Elders and their Suppliers.
After numerous requests for more information, we decided to examine the functions, realities, and benefits of an integrated inventory management system, and what it could mean for your business.
“Consignment stock and agency distribution have become a growing part of the business model for many Agribusiness companies,” said Glen Andrews, Asia Pacific director of Proagrica, provider of the inventory management solution that Elders use, “and there are significant commercial benefits for suppliers, their customers and other supply chain partners if we get it right.”
However, consignment stock is administratively complex, prone to human error and unwieldy to manage. This leads to low visibility of sales and stock levels or, worse, inaccuracies. At best, these systems require significant time to manage processes effectively. Unfortunately, in reality, cumbersome systems like these can result in inaccuracies and an erosion in customer confidence, which in turn can lead to measurable financial impact.
What are the challenges faced by outdated systems, and how can integrated inventory management help?
- Multiple retail stock management models – how can they work together?
- Manual management of stock can often be out of date, inaccurate or incomplete
- Lack of visibility of sales data can lead to delayed sales recognition and inaccurate P&L and balance sheets
- Limited stock accountability resulting in inaccurate accounts and non-compliance with legislation
- Costly and error-prone manually intense processes
- Disparate partner systems and processes means lack of communication between trading partners
- Manufacturing capacity planning is compromised
How does the inventory management system work?
- Managing multiple stocking models – agents and retailers can meet the needs of suppliers through good stock management and provision of sales data that is both accurate and timely
- Greater supply chain visibility of stock – suppliers can see stock movements and quantity enabling efficient management
- Collaborative forecast – improves working capital management and prevents lost sales between retailers and manufacturers
- Provide proper stock control, visibility and auditing – allows management of multiple stock locations within an agency model or consignment stock process
- Simple, fast and easy to use – data can be entered/administered by end users regardless of their technical capability
- Accurate and timely sales, stock and inventory data – enabling timely and accurate billing, replenishment and production
- Future proof design – allowing for full integration with existing or planned back-end systems
- Minimise manual work, administration and errors – reporting of sales by representative or by territory updated with accurate and timely data
“Adoption of data driven supply chains are vital for agribusiness economies competing on a global scale” added Mr Andrews. “Cutting-edge technology enables business growth, the ability to intelligently plan for meeting customer demand, and boosts customer loyalty — vital outcomes for any business in the agriculture supply chain wishing to stay competitive.”
End users need a solution that is simple and fast to use, that will increase the efficiency of process management, and is a recognised proven industry solution that works for everyone, rather than deploying competing applications. An advanced inventory management system is the available alternative for the industry, for any business seeking a way to make their processes simpler, more powerful, and more profitable.
Visit proagrica.com to get the full story about Elders’ use of integrated inventory management and learn more about solutions to grow your business.