Extending inventory management

The science of inventory management has gradually developed, not because the theories have leapt forward, but because requirements change. No longer is inventory management a single problem but it is integrated into the whole of logistics of supply. The manager is now co-ordinating

• warehouse operations

• inventory control

• distribution

• suppliers

• customer operations

and attempting to optimize the profit for the supply chain rather than just keep delivery on time up and inventory down.

However, the targets are still the same but in a wider context:

• better customer service

• lower inventory

• decreased operating costs,

but now the focus is on the whole supply being lean, not on the individual echelon.

The development in information technology (IT) communications enables information to be gathered and exchanged immediately and accurately, and makes the information available to everyone. However, the challenge is now:

• collecting data accurately

• being willing to share it along the supply chain

• understanding how to use it most beneficially

• working for the good of the supply chain and not for political gain.

The techniques discussed in previous chapters are the basic methods to be used in each step of this chain. They then have to...