How to manage and mitigate inventory risk

According to a report by materials science company Avery Dennison, an average of 8% of stock perishes or is discarded annually, costing approximately $163 billion of inventory.

As product lifecycles shorten across industries, improving visibility into inventory flows is critical to optimize inventory turnover and mitigate the risk of unwanted excess inventory. So, how do you manage inventory risk? 

To navigate complex relationships between shipments, orders, and products, supply chain operators need timely, accurate shipment tracking data, including quantities on order and in transit, and order and SKU data within every shipment.

Better insights lead to better planning

With SKU-level visibility, your teams can: 

• Marry accurate and timely transportation tracking information with SKU-level details like lot, batch, production, and expiry dates to visualize inventory aging and deprecation and reduce the risk of excess inventory or obsolescence. 
• Identify, cancel, or redirect late supplier POs that haven’t shipped, improve inventory turnover, and minimize unwanted or out-of-season inventory across your network. 
• Store and cross-reference due dates at order and line levels with ETAs to identify potential delays and enable proactive inventory management decisions.  

With granular visibility, your teams align behind timely, data-driven decisions to improve supply chain planning, prevent obsolescence, minimize product markdowns and liquidations, and control inventory costs.  

A platform that adapts your data, not the other way around

To consistently mitigate inventory risks, supply chain leaders need an adaptable data infrastructure so their teams can access accurate, up-to-date information at the right time.  When every operator on your team has the necessary information, key insights from across your supply chain, and the tools to help them resolve issues, they can proactively manage risks and prevent disruptions before they occur. 

With a well-defined risk management strategy supported by Unity SCM’s adaptable platform, your organization can improve its inventory management, minimize unwanted stock, and reduce excess carrying costs. 

For more information, contact the Unity SCM team today.