New Inventory Practices in the FMCG Companies to Balance Supply and Demand
cost-efficient services.
To manage inventory successfully, one must maintain a proper equilibrium between inventory supply and customer demand. FMCG companies use several intelligent inventory practices to reach operational excellence while maintaining customer contentment.
For example, an FMCG company can implement the RFID warehouse management system that will help the companies track the items and keep tight control on the items. In this blog, we will understand each of the new methods being implemented by FMCG companies.
1. Demand Forecasting with Data Analytics
The success of inventory management systems is an essential base in precise demand forecasting systems. FMCG companies achieve upcoming demand pattern predictions through advanced analytics and artificial intelligence by combining time-based pattern analysis, external market factor analysis, and consumer behavior trends analysis. Companies expect their beverage sales numbers to grow stronger during the summertime while snack sales increase progressively before major sporting events.
2. Following the Just-in-Time (JIT) Inventory Model
The JIT system helps companies lower their inventory-holding expenses while diminishing the possibility of their stock becoming obsolete. Companies should implement JIT because it optimizes inventory management predominantly for perishable goods, including dairy and bakery products. No disruptions can occur when implementing JIT inventory because it needs both an efficient supply chain infrastructure and strong supplier partnerships.
3. Safety Stock and Buffer Management
FMCG companies utilize safety stock as an operational security measure to protect against unexpected changes in customer orders and supply delays despite using JIT inventory management. The foundation for safety stock determination depends on calculating the best amounts matching first product variability measurements and lead time calculations along with service objectives.
4. SKU Rationalization
A review of Inventory performance determines underperforming SKUs through Stock Keeping Unit (SKU) rationalization activities. Companies achieve more straightforward inventory control and save costs on inventory storage through product portfolio simplification as well as a selection of high-demand items. Better-performing products receive released resources through this practice as inventory meets current consumer preferences effectively.
5. Technology-Driven Inventory Management Systems
FMCG companies conduct stock management through contemporary systems relying on AI technology along with IoT components. Through these systems, organizations gain a real-time view of inventory amounts and automated control over the entire supply chain while conducting automated product restocking tasks.
6. Collaborative Planning with Supply Chain Partners
The supply chain management for FMCG businesses needs direct cooperation among suppliers and distributors as well as retail stores to operate efficiently. CPFR is an information exchange system that helps partners of FMCG organizations improve joint decision-making through data sharing.
In this phase, an FMCG company can look for RFID inventory system costs as that enables the company to stay connected with the suppliers and vendors and can look at the real-time data of those units.
7. Addressing Seasonal and Regional Variations
The operations of FMCG businesses heavily depend on active connections between suppliers, distributors, and retail outlets for smooth supply chain management. Companies achieve schedule alignment between production and distribution processes and market demand levels by implementing transparent communication systems.
Thus, by leveraging technology, data analytics, and collaborative strategies, FMCG companies can balance supply and demand effectively.
