Warehouse stock costs money and is often the result of inadequate planning. This does not necessarily have to do with salable end products meant to guarantee a satisfying delivery service level. Often it is production materials and semi-finished products that are either ordered too early, over-ordered or incorrectly ordered because of inaccurate planning or in order to ensure production readiness. The safety aspect, in turn, is frequently a result of the lack of transparency in the systems or a seemingly excessively high amount of materials to be planned per planner.
In this case, it is not only storage that costs money, but price declines, capital commitment, durability and technical obsolescence also play an essential role in evaluating the inventory cost trap.
Inventories and the associated capital should thus be kept to a minimum, slow-selling items and dead stock avoided and no excessively high safety stocks established.
SAP ECC SAP S/4 HANA
- Efficient, effective, and sustainable inventory optimization
- Transparency regarding inventory drivers and risk materials
- Evaluation of consequences and risks through simulation of MRP parameters