Inventory Management - understanding your customers!
Inventory Management & your customers
One of the main reasons many businesses carry excess stock is because they don't understand the needs of their customers. In fact, does every customer require the entire order immediately? A more thorough understanding of each major customers detailed delivery time-frame, can frequently identify issues that can result in benefits for both supplier and customer. Possibly supplying 50% of the order this week, with the remaining 50% delivered next week could be adequate or even preferred by your customer.
While many companies offer volume discounts to their customers for placing large orders, this can freqently have a negative impact on cashflow unless effective supply chain management strategies are in place. Build-to-order manufacturers may receive a benefit from large orders by reducing setup costs, many stocking manufacturers, dealers or wholesalers often require less stock when shipping smaller orders more frequently. Understanding your customer's needs is fundamental to your inventory management success, and a critical component of Core Logistics Consulting's approach to creating an effective Inventory Management Strategy for your company.