Inventories in the Sales Channel

Escrito el 17 agosto 2009 por Jesus Guerro en General

We all know that the vast majority of manufacturing companies plan their production based on forecasts or sales orders on one hand and inventory reports for the other. So they set their MRP systems with the intention to adjust production to demand.
No less common is that production planning dismiss inventory on the sales channels and focus solely on their own inventories.
This may prove fatal to the efficiency of management. The sales  channel can be extremely long; Own warehouses, Wholesalers, Distributors, Retailers and  Points of Sale
.. and this may lead to 80% of goods waiting to be sold, not as invoiced, but as consumed, is located in the warehouse of intermediaries.
Tracing production planning knowing only 20% of the total inventory can be dangerous.
Companies must understand that a product is not sold until it is consumed.
Any invoice can be cancelled; any sale may be returned.
If we do not make an effort to control the stocks of our sales partners, we are in serious danger of «overmanufacturing» or «downmanufacturing» bringing the risks associated with surplus inventory or losing sales due to lack of product, ie,  hidden demand.
Each agent of the sales channel may have its own purchasing policy, which inflows may not have to coincide with their outflows.
This implies an element of uncertainty to produce based on previous orders. We can not understand goods sold only for being delivered. It is necessary to know the daily movements of product to the final exit door. The counter of the last point of sale.
To control these inventories were created so-called «Inventory Management Systems» that are web based applications where dealers update their sales or movements. Thus the manufacturer monitors the actual flow of product and plans according to actual data.
You can, likewise, identify shortcomings in their sales channels and to make transfers on the channels before the product becomes obsolete.
Obviously, this system is usually accompanied by a commission plan and provided that the manufacturer would for an important broker in his portfolio.
If you can not reach that level of commitment, should be the sales team who regularly resporte these inventories to be included in the MRP.
In this way the efficiency of the supply chain will improve dramatically.


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