Inventory Analysis: An Essential Aspect of Supply Chain Planning

Inventory analysis is crucial to supply chain planning. With the increase in the number of online shoppers and cloud companies that operate primarily on the web, inventory analysis has become all the more important. With the proper inventory analysis, you can not only manage your stocked products and warehouse much better but also improve the overall structure and operations of the business. The E-commerce supply chain requires correct inventory analysis at all stages of operations. It helps you to calculate the resources you need, to optimize the functions, and judge whether your company can or cannot take up a new project with the available resources and materials. 

ABC Analysis: This is a cause-effect based inventory analysis method that provides immense assistance to a majority of supply chain planning agencies. A, B, and C are three different inventory classes, with A being the most critical. A-inventories bring in maximum profit and ideally should never be out of stocks. B-inventory deals with items regularly sold but do not bring in as much revenue as the A-class. This difference could be due to the prices or rate of manufacture. C-inventories don’t sell as much as the other two classes and bring in the least profit. 

VED Analysis: Similar to ABC analysis, the VED analysis, another critical aspect of logistics management, tells you which inventories should always be in stock and which are not as vital as the other. The division can not only bring down your inventory and warehousing costs but also effectively increase sales and bring in more profits. 

Safety Stock Analysis: By implementing real-time data, this method allows you to handle situations like a sudden shortage in the inventory or a rise in demand. With the safety stock analysis technique, you can optimize your logistics management system, improve the supply chain planning, and make more revenues even in times of struggle.