Why Inventory Visibility Matters More Than Inventory Counts

Many businesses assess inventory performance based on how accurate stock counts are. While inventory accuracy is indeed significant, it is often not the operational performance factor upon which business performance depends. This is where visibility really comes into play. You can take a perfect inventory count every single month, but if the information isn't readily available to make business decisions, the business still has an inventory problem. Inventory visibility is defined as knowing;
what inventory you have,
where inventory is located,
how quickly the inventory is moving and,
when the inventory needs replenishing.
Without this knowledge, decision making is often made by necessity, not informed decisions. Orders are placed, "because I don't know what we have", warehouse staff searches endlessly for stock and sales staff make promises they may or may not be able to fulfill, all while the system states that what you do have in stock, is where and how fast it should be. This often occurs even though inventory records are accurate to the decimal point. It's a case of the information not being readily available, to where the decision needs to be made. A technically perfect, but dated report is often of less value than an slightly inaccurate, but live, report. As business expands, the role of visibility will undoubtedly increase due to stock no longer being centralized in one single location. Whether inventory is moving through:
warehouse(s)
retail outlet(s)
fulfillment centers
suppliers
customers
The movements of products create additional data to capture and convey. When visibility starts to erode, business control becomes fragmented. The reliance shifts to:
manual checks
spreadsheets
verbal information
personal opinion.
While these may provide some measure of immediate comfort, these methods are unsustainable in a growing environment. Robust systems aim to narrow the divide between real time event and the updates in a system, so the faster that inventory data moves throughout the business, the more accurate the business decisions will be. The goal of inventory management is not to understand what has occurred. It is to understand what is occurring right now. For more information about inventory visibility and operational workflow, please visit:
https://theinventorymaster.com