Home > Supply chain fulfillment warehousing > Fulfillment and distribution > Inventory Management Fulfillments Greatest Challenge
Inventory Management: Fulfillments Greatest Challenge
When the economy is thriving, customers purchase products at an astonishingly rapid rate, and keeping on top of inventory is the greatest challenge of a fulfillment center. When the economy is struggling, customers cut back on or even cancel orders at an astonishingly rapid rate--and keeping on top of inventory is still the greatest challenge of a fulfillment center.
But what exactly does excellent inventory management look like?
The Just In Time Revolution
Here are two major fulfillment improvements made famous by Walmart:
Not every fulfillment center can function as efficiently as Walmarts, but every fulfillment center can and should strive for lower holding costs and lower ordering costs.
Those are definitely two things to look for in a fulfillment house.
Fulfillment Still Not Even Close to Easy
In todays business world, order fulfillment often involves dealing with not just one supplier but four; not just one country but three; not just one customer but 5,000. The ascendancy of online ordering has added another layer of complexity to the fulfillment process.
In a system with so many moving parts, inventory issues are a constant concern. Too much inventory means too much cost, but too little inventory can mean unfulfilled customers.
Inventory concerns can become particularly acute in leaner economic times. Order flow may decrease substantially, causing drastic inventory reductions. Nevertheless, fulfilling the orders that do come in is as important as ever.
Fulfillment Entails Working Together
Its an interesting question, and an apt one, insofar as it points to a basic reality of inventory management: it takes two to make a thing go right. No fulfillment center should be counted upon to know more about a companys inventory needs than the company itself.