Inventory Management

Local and company-wide Inventory Optimization

Stocks have to be considered throughout the entire supply chain and not only on a local basis, from the raw material to a finished product. This view on inventories is necessary within a company just as well as in corporate networks. Modern methods in inventory management allow analyzing the stock situation in a network of enterprises (value added networks).

The ideal stock level

In context of this question naturally different interests and business objectives collide that need to be reconciled:

  • low capital tie-up,
  • inventory availability,
  • low stock levels and
  • short delivery time.

The Fraunhofer IML balances these competing objectives in inventory management and enables creating significant cost reduction opportunities and an increase in customer service level.

Inventory optimization on an intercompany level in supply chains

Regarding an entire supply chain, the optimization surpasses local improvements and includes the stock optimization of all participants of the supply chain. The tools and methods of the Fraunhofer IML not only allow identifying an overall optimum.  Conflicting interest of cooperating companies can be determined, quantified and brought into balance.

Procedure of the inventory optimization

The Fraunhofer IML procedure applied in inventory management related projects has proven to be efficient and is generally divided in four phases:

  • Analysis
  • Determination of potential
  • Development and implementation of measures
  • Reporting and monitoring

Benefit of a holistic stock management

  • Transparency over inventory levels and inventory costs
  • Identification of supply shortages
  • Improve delivery times
  • Reduce costs by reducing inventory, or by adapting the parameters for materials planning
  • Sustainable planning, management and control of stocks (e.g. related to ERP-systems)