05 Jun Unlock Logistics Efficiencies with Inventory On Demand
Inventory On Demand (IOD) is a revolutionary system in the world of outsourced inventory management. It’s well known that inventory control contributes the most to supply chain cost reductions, but the current landscape of supply chain management makes optimizing inventory difficult. Complexities related to myriad shipment variables, volumes, and customer densities often result in inefficient inventory supply chains that suffer from redundant processes and expensive labor costs.
IOD takes a new approach to the supply chain and helps businesses unlock logistic efficiencies within numerous fields:
- Inventory management and availability
- Routing and distribution
- Speed of fulfillment
- Balance sheet assessment
- Quality and compliance
How Inventory On Demand Supports Logistic Efficiency
IOD allows a third-party provider to take ownership of goods from the factory floor all the way to the point of consumption. By using smart routing, optimized distribution, and an innovative system of supply-on-demand inventory, IOD creates significant competitive and cash advantages for the businesses using it
The secret is the logistic inefficiencies exposed by third-party management of the supply chain. When professionals assess disparate supply infrastructure using streamlined protocols for inventory management, even the leanest of supply chains find efficiency enhanced.
First and foremost, among the benefits of IOD is the end-to-end control over inventory that it provides. Forecasting consumer need is always a challenge in the typical supply chain for Original Equipment Manufacturers (OEM). There are just too many variables to consider. This lack of control usually results in excessive buffering of inventory or a lack of inventory such that businesses must spend extra to expedite shipping.
IOD services take ownership over in-transit goods, providing real-time inventory management that provides more flexibility. IOD time-shifts and place-shifts purchases, letting OEMs buy products at the last possible moment and immediately fulfill orders for customers through customized, regional distribution. This method helps OEMs to minimize the capital spent on inventory management.
IOD services allow third-party providers to take control of how inventory ships. When OEMs leave control of finished goods movement to supplies, transportation is inefficient by nature. Transportation routes can’t be optimized or synced across the supply chain when disparate decision-makers are involved. IOD centralizes routing of inventory and guarantees that shipments are sent along optimal channels for cost reduction.
When assessing shipping protocols in the supply chain, IOD services examine each shipment and help business owners determine the most efficient method of transportation. Rather than shipping packages individually and suffering from exorbitant import/export fees, IOD services consolidate high-value shipments to help business owners reduce the expenses associated with packaging and transport.
We know the complexity of global supply chains means that goods are shipped back and forth across transportation channels that often route them far beyond their point of consumption. IOD optimizes this process by taking ownership of completed goods and retaining them in strategic regional hubs near their fulfillment point. This change results in reduced transportation costs, faster customer fulfillment, and supports sustainability by cutting travel-related carbon emissions.
When in-transit inventory is held by a third-party, OEMs never should worry about a lack of order fulfillment. Depending on the product, several weeks of inventory can be held at once and be made ready to ship at a moment’s notice. Combine this with the overall optimizations that IOD provides for a business’s transportation network, and fulfillment speeds can reach levels never seen.
Balance Sheet Visibility
Transferring control of inventory to a third-party exposes balance sheet inefficiencies of which OEMs may not be aware. There are significant costs associated with owning and managing goods to the point of consumption, which many businesses fail to track:
- Costs of hiring and managing multiple transportation providers or import/export brokers
- Costs of providing warehousing in origin and destination countries for storing and consolidating goods
- Costs related to maintaining accounting, compliance, logisticsdis, and transportation personnel
IOD services for a supply chain expose these expenses and help OEMs gain a stronger understanding of the real costs of inventory ownership.
Quality Control and Compliance
End-to-end management of the supply chain means guarantees quality across each step. When suppliers or other third-party providers manage transportation and distribution workflows, each act to their own standards of quality and offer no guarantee of quality or compliance with C-TPAT or ISO-9001. IOD supports efficiency at each step of the supply chain with a combination of streamlined processes and hands-on assessment by personnel at key manufacturing hubs.
Streamlined Service with Inventory On Demand
Broadly, IOD presents business owners with one important question: If you could adapt your supply chain to place your manufacturing plants directly next to your customers, would you do it?
This example is the value offered by IOD services. By assessing and optimizing each step of the supply chain, IOD unlocks a broad range of logistic improvements and supports a comprehensive system of service efficiency and product availability.
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