Sunil Kilaru highlights the importance of Inventory Optimization in Today's Market?
If you are a business owner, it is important to have a solid understanding about inventory optimization
If you are still not convinced, let's go ahead and take a look at the reasons as explained by Sunil Kilaru, which have created the need for inventory optimization in today's market.
• You can receive the benefits associated with quantity discounts and price increases
If you are expecting a price increase in the next few months, due to changes that take place in supply and demand within the international or local market, you will come across the need to have a better understanding about the impact that it can create on your company. Along with that, you will also come across the need to understand the impact created by budgets and taxes.
The companies that purchase raw materials in bulk will be able to take maximum advantage out of the quantity discounts that they can get from suppliers. In such a situation, you can experience savings on the discounts. These savings will be higher when compared to the inventory carrying expenses. Hence, you need to make sure that you go ahead with inventory optimization.
• You can cater to the seasonal and cyclical demand
With the help of inventory optimization, you can cater to the seasonal and cyclical demand in an effective manner. Some of the external factors, such as seasons can create an impact on your demand. For example, the demand for your products will increase during the seasonal times and you should make sure that your inventory is ready to cater the demand.
• You can meet the variations that take place in product demand
As per Sunil Kilaru, Your production plan would change according to the estimates, sales, stocking patterns and orders. As per the changes in the demand for raw materials, the supply for production would vary.
• You can reduce the transit times and expenses
In case if you are importing raw materials from another country, or from a vendor that is based in another geographical region, inventory optimization can help you to save a lot of money on the transportation expenses.
• You can hold the high demand and long lead items within your inventory
The supply of raw materials from vendors is usually associated with a long lead time.
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