Channel Inventory

Most companies have optimized their supply chain to lower the cost per unit value of goods carried, by optimizing the transportation and warehousing for timely order fulfillment . But, most of them are unable to optimize their Channel Inventory for the demand and service level goals. Demand planning based on sales history and Channel Inventory will give a definite competitive edge to companies and will help in lower inventory investments leading to lower working capital costs Companies get the month end stock & sales and area wise sales report from their stockist to gain visibility into

  • How much did the company under achieve its sales target, due to lack of product availability at the right place and time ?
  • What products are selling & How much ?
  • Where are they selling and when ?
  • How much is the inventory carried by the stockist ?

Most organizations face two challenges in getting the above information that is vital to their supply chain and production planning and optimization. The first challenge is the time and effort spent on getting the information. While the sales person had to spend significant part of his quality time waiting at the stockist place, the stockist is burdened with servicing a large number of company representative waiting for the reports. Even after so much time and effort from the company representative and strain and cost to the stockist, companies at best get a snap shot view and not a continuous view.

The second challenge is the time it takes to generate actionable MIS reports based on the information collected. Typically, the reports collected manually are sent through the sales organization to the head office and it takes weeks and some times months to get MIS reports generated based on this data.

The lack of timely availability of data coupled with the poor quality of data due to manual processes results in sub-optimal demand planning and excess Channel Inventory

 

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