Milestone 3.docx

Milestone 3.docx

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  Nishith Shekhar Sec-A Realme Inventory ManagementStrategy Realmeis one of the world’s largest manufacturers, meaning managing their inventory is an enormous and complex task. Realme has implemented a number of initiatives to secure its supply by fostering long-term relationships, growth and stability with key suppliers and customers. By offering support to its partner companies through innovation, communication and corporate social responsibility, Realme has been able to ensure sustainability and security in its supply chain – which is seen as one of its leading competitive advantages in the marketplace. Realme has a specific set of best practices it follows to manage its supply chain. It uses an Advanced Planning and Scheduling (APS) system that automates the management of materials and production – and can adapt to changes – to optimise production levels. Since 2004 Realme has also been using the Lean Six Sigma method, which is a management technique aiming at sustained improvement of manufacturing processes through statistical & financial analysis. The five key steps of Lean Six Sigma are define, measure, analyse, improve and control – usually referred to as DMAIC. Realme uses this method to identify and deal with problem processes – eliminating waste and defects by removing any use of resources that does not create value for the end customer. Challenges Facedin Inventory Management 1. Inconsistent Tracking: Using manual inventory tracking procedures across different software and spreadsheets is time-consuming, redundant and vulnerable to errors. Even small businesses can benefit from a centralized inventory tracking system that includes accounting features. 2. Warehouse Efficiency: Inventory management controls at the warehouse is labor- intensive and involves several steps, including receiving and putaway, picking, packing and shipping. The challenge is to perform all these tasks in the most efficient way possible.
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  3. Inaccurate Data:You need to know, at any given moment, exactly what inventory you have. Gone are the days when inventory could be counted once a year with an all- hands-on-deck approach. 4. Changing Demand: Customer demand is constantly shifting. Keeping too much could result in obsolete inventory you’re unable to sell, while keeping too little could leave you unable to fulfill customer orders. Order strategies for core items, as well as technology to create and execute an inventory plan, can help compensate for changing demand. 5. Limited Visibility: When your inventory is hard to identify or locate in the warehouse, it leads to incomplete, inaccurate or delayed shipments. Receiving and finding the right stock is vital to efficient warehouse operations and positive customer experiences. 6. Manual Documentation: Managing inventory with paperwork and manual processes is tedious and not secure. And it doesn’t easily scale across multiple warehouses with lots of stock. 7. Problem Stock: Perishable and fragile stock need specialized plans for care and storage. And high-value inventory needs specific loss-prevention strategies and inventory controls. Supply Chain Complexity: 8. Global supply chains shift daily, placing a burden on your inventory planning and management operations. The manufacturers and wholesale distributors that dictate when, where and how your inventory ships require flexibility and offer unpredictable lead times. 9. Managing Warehouse Space: Efficiently managing space is an intimidating task. Planning and designing warehouse spaces with inventory management platforms helps you better control the timing of new stock deliveries. It can account for important factors, such as available space. Read more about the differences between warehouse management and inventory management. 10. Insufficient Order Management: One of the most common challenges to sound inventory management is preventing the overselling of products and running out of inventory. Using historical and seasonal data trends can help you accurately predict customer orders. 11. Increasing Competition: Globalized supply chains are subject to unpredictable economic shifts and market forces that impact the competition for raw materials. Small businesses are sometimes faced with choosing between competing for high- demand materials or holding enough inventory to control costs. 12. Evolving Packaging: Compostable packaging—or removing packaging all together— to reduce waste presents new obstacles for warehouse design and storage. It may even mean new equipment or shorter shelf life for some items. 13. Expanding Product Portfolios: Many online retail strategies remove the need for large warehouse distribution centers. These strategies make it easier to expand inventory and diversify product portfolios, but demand technology and resources for ordering, shipping and tracking.
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  14. Overstocking: Keepingtoo much stock on hand can be as problematic as having too little. Overstock impacts business cash flow and leads to inventory-related problems, such as storage and loss. 15. Inventory Loss: The loss of inventory due to spoilage, damage or theft can be a supply chain problem. It requires identifying, tracking and measuring problem areas. 16. Poor Production Planning: Production planning is vital for avoiding delayed manufacturing and cost overruns. If not done well, it can impact sales forecasts and project scheduling. 17. Lack of Expertise: It can be tough to find skilled inventory managers who are adept at the latest technology and can improve inventory strategy. Simply upgrading your inventory management platform with a host of features isn’t enough. You need capable management. 18. Poor Communication: Communication and collaboration are key. When departments are apathetic about sharing information, it makes identifying inventory trends and finding ways to improve much more difficult. 19. Inefficient Processes: Low-tech, manual inventory management procedures don’t seem like a daunting challenge when inventory is small and there’s only one warehouse location to manage. But as sales volume increases and inventory expands, inefficient, labor-intensive and low-tech standard operating procedures are difficult to scale. 20. Inadequate Software: To scale inventory management software to support complex logistics, it needs to integrate with your existing business process platforms. The difficult task is choosing from hundreds of inventory management solutions and mastering a host of features that require training and ongoing support. Solutions to Overcome the Challenges 1. Centralized Tracking: Consider upgrading to tracking software that provides automated features for re-ordering and procurement. Inventory management platforms provide centralized, cloud-based databases for accurate, automatic inventory updates and real-time data backup. 2. Transparent Performance: Measure and report warehouse performance metrics like inventory turnover, customer satisfaction and order processing speed to overcome warehouse inefficiencies. Share this data with employees and suppliers. 3. Stock Auditing: Frequent stock auditing processes, like daily cycle counting, reduce human error and provide more accurate, up-to-date inventory data for managing cash flow. Organize audits by category and cycle count smaller inventory samples on a predictable schedule for more accurate financial data. 4. Demand Forecasting: Some inventory management platforms include demand forecasting tools. This feature integrates with accounting and sales data to help you predict demand and schedule orders based on shifting customer preferences, material availability or seasonal trends.
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  5. Add Imagery:Add images with product descriptions in your inventory database to improve purchasing and receiving processes, enhance accuracy and prevent misplaced inventory. 6. Go Paperless: Give employees the right inventory tools for the job. They need software to replace manual inventory documentation, and paperless transactions for invoices and purchase orders. 7. Preventive Control: Implement stock control systems to manage problem inventory, such as perishable stock, fragile equipment or obsolete materials. Perform regular preventive maintenance on machinery and equipment stock in storage if required by the manufacturer. Catalog data on problem stock location, cost and quantity to monitor shelf life and prevent waste. 8. Measure Service Levels: Monitor and track supplier data, such as shipment errors, damaged or defective products and missed delivery appointments. Measure your supplier’s performance to find and fix supply chain disruptions, reduce complexity and streamline logistics. 9. Optimize Space: Use inventory management systems with warehouse management features to optimize storage space and inventory flow. Categorize inventory storage down to shelf, bin and compartment, and automate order picking, packing and shipping workflows. 10. Automate Reorders: Backordered inventory delays production and creates poor customer experiences. Use inventory management software to set automatic reorder points based on preset stock levels and current availability to avoid overselling. 11. Safety Stock: Maintain safety stock to offset supply chain disruptions and help manage increased lead times due to shifting international competition for raw materials. Proper inventory planning helps operations adapt to dynamic global supply chains. 12. Classify Inventory: Create inventory classifications to manage changing trends, such as packaging initiatives to reduce plastic waste. Categorize stock by packaging type, dimensions and product. Use this information to control shipping costs and storage location better. 13. Multi-Location Warehousing: Use multi-location warehouse management features to track and control expanding inventories. Take advantage of receiving and put-away schedules with automated inventory tracking alerts and scheduling features that keep tabs on warehouse location and in-transit inventory. 14. Leverage Lead Times: Take lead times into account when placing orders for high- demand stock. Track and manage your high-demand inventory using cycle counting data to set automatic reorder points and average lead time to preventing stockouts. 15. Reduce Human Error: Use inventory control processes like blind receiving with barcodes and mobile scanners to prevent human error, inventory manipulation and shrinkage due to theft or negligence. 16. Plan Demand: Use an inventory management system with advanced demand forecasting and reporting features to prioritize your top inventory. Take into account the availability of the top 20% of inventory that generates 80% of your customer
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  demand. To learnmore about inventory planning and demand forecasting, read our essential guide to inventory planning. 17. Subcontract Expertise: Consider outsourcing to an expert in inventory management. Contract in-person training and provide online support to help employees follow best practices for working with technical inventory management software features. 18. Dashboard Collaboration: Introduce dashboards with simple interfaces that show real- time inventory data. Having everything on one screen helps remove communication barriers across accounting, sales and warehouse operations. 19. Productivity Tools: All the information you need about your inventory can be in your pocket. With mobile solutions and cloud-based software, you can control inventory and improve your warehouse productivity from anywhere in the world. 20. Update Platforms: Upgrading to a cloud-based inventory management platform doesn’t just give all the latest features. You get to take advantage of the vendor’s expertise and training while it’s being implemented. Supply Chain Management Realme strives to achieve cost competitiveness as well as operational efficiency through strategic supply chain management while maintaining its focus on sustainability as well. The supply chain management strategy of the company is based on five important criteria. They are cost competitiveness, human resources capacity, on-time delivery, response to risk and supplier competitiveness. Realme focuses on the economic, social as well as environmental aspects of its supply chain operations to manage its impact in all the three areas. 1. Economic The focus of Realme’s supply chain management strategy is to ensure an all- encompassing competitive edge in terms of cost, delivery, quality, technology, and human resources in order to maximize synergy, speed, and efficiency with its suppliers and create a corporate ecosystem that enables sustainable growth. Cost efficiency, product quality as well as technology are some important focus areas in terms of supply chain management for Realme. 2. Social Realme also ensures that the suppliers abide by international standards and regulations in the areas of human rights management, work environment, ethics, and conflict mineral issues with the aim to build an open and transparent management accountability system that engages all stakeholders along the supply chain. Social responsibility and business accountability among suppliers is also an important focal point of Realme’s supply chain management strategy. 3. Environmental To manage an environmentally sustainable supply chain, Realme works only with Eco-Partner certified suppliers. This way it ensures that it can assess and manage the environmental impact of components, raw materials, and manufacturing processes. Realme had adopted sustainability best practices in manufacturing long back in 2004
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  and its productionprocess focuses on making products sustainable right from the planning stage through an eco-friendly design. Supply Chain Issues 1. Increased Costs Throughout the Supply Chain Profit margins are under pressure as costs creep up throughout the supply chain network. These costs come from many areas, and a lack of visibility and accountability for reducing them can result in rising operational expenses. Major contributors to increased costs include:  Rising price of fuel to transport goods by road, sea or air  Increasing commodity prices raising the cost of raw materials  Higher labor costs from suppliers and manufacturers  Complex international logistics leading to higher charges for storage, transfer and management of products 2. Supply Chain Complexity Due to Multiple Channels to Market Consumers buy products across multiple channels, and as routes to market increase, the underlying supply chain must adapt. Supply chain managers need to develop variations on supply chain processes to address each of the channels:  eCommerce websites selling directly to consumers require fast last-mile delivery and local logistics.  Traditional retailers and wholesalers need large storage locations close to major metropolitan areas, combined with accurate inventory control to ensure product availability.  Third-party marketplaces like Amazon require a deep understanding of fulfillment options and close compliance with their terms and conditions.  Drop shipping retail requires fast international services so that consumers receive goods quickly. Supply chain managers must manage multiple supply chains, third parties and other organizations to ensure a good end customer experience, regardless of how they order and receive products. 3. Consumer Demands Drive Need for Improved Speed, Quality and Service Consumers have never had more choice, and every industry is facing disruption. Every touchpoint with an end user needs to be focused on providing excellent products and services. Quality and speed are becoming as important as pricing when it comes to purchasing goods:  Consumers want retail goods immediately and online goods within a few days.  Products must meet the quality requirements demanded by consumers.  Raw materials, goods and finished products must meet safety and other compliance regulations mandated by law, in all countries where they’re available.
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   The environmentalsourcing of goods is becoming more important to ethically- aware consumers. The most successful products are those that meet consumer requirements of quality, availability and price. The underlying supply chain is vital to meeting those needs. 4. Risk in the Supply Chain Creates Pressure International complexity, environmental changes, economic pressures and trade disputes all put pressure on the supply chain. This pressure can easily turn into risks and issues that snowball throughout the network, causing significant problems:  Suppliers, manufacturers, logistics, clients and customers are spread across multiple countries, time zones and continents, requiring careful coordination and management.  Adding more steps to the supply chain creates exponential complexity for upstream and downstream partners.  Siloed data and a lack of visibility increases the difficulty of reporting, business intelligence and good decision-making.  Regulations, compliance and quality management demands strong agreements, contracts and controls with supply chain organizations. Supply chain managers must develop contingencies and mitigating action plans to prioritize and eliminate risks and manage issues when they occur. 5. The Impact of Supply Chain Volatility Volatility and complexity don’t just create problems at a specific point in the supply chain, instead the impact can ripple throughout the entire infrastructure. Supply chain managers must deal with these issues promptly before they create delays, backlogs, bottlenecks and other issues. Political circumstances and protectionism are introducing tariffs across trade routes that results in additional fees, delays and increased customs processing time. This means slower international shipping and the ability for competitors in different countries to take advantage of lower tariffs. Increasing volumes of internationally-sourced goods are driving up port congestion. This creates additional pressures as ships, trucks and trains need to wait to load, unload and transfer products. These issues are exacerbated as port authorities and operators charge organizations to store goods at the port. An ongoing, chronic shortage of long-haul drivers is creating major issues with trucking capacity, leading to delays when transporting goods across countries. The pressures on the role of the truck driver is making it a less attractive profession, and logistics providers are finding it more difficult to attract and retain the right people. These are endemic problems in the supply chain, and it’s almost impossible to resolve them on a local or organizational level. Instead, supply chain managers need to understand the major issues impacting supply chains around the world and create strong reporting and management plans to resolve issues quickly.
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  Much of thiswill be down to predicting problems before they happen, building robust contracts and relying on strong relationship management, collaboration and prioritization to minimize the impact. 6. Other Demands on the Supply Chain Other areas supply chain managers need to consider include:  Speed to market based on just-in-time manufacturing – This requires certainty around the location and timeliness of raw materials, parts and products.  Demand for products based on sales and marketing cycles – Consumer demand for product lines must be predicted and identified early and planned into supply and manufacturing.  Inventory management based on balancing availability and costs – Retailers want to cycle through inventory more quickly and not have so much of their cost sunk into slow-moving products, requiring faster upstream supply chain management.  New products require fast prototyping and development – Bringing a new product to market demands a reliable, fast and high-quality supply chain.