Senior management understands that inventory is regarded as a ‘black hole’, absorbing cash and resources. With appropriate business intelligence, ‘black holes’ can be effectively addressed, and the company will realize a direct effect on bottom line profit.
Some of the challenges faced:
- To improve visibility of data that can help to identify inventory positions and potential stock out issues.
- To reduce the non-value added labor dedicated to the management of physical inventory.
A flexible, powerful Business Intelligence system is worth, where you need to understand current inventory levels, plan for a seasonal buying frenzy, find out the status of inventory for internal consumption and predict required inventory.
BI reports are very important for Inventory Management, manager:
- Ports and terminals can increase the opportunity cost, inventory accuracy and reduce the non-value-added costs by seeking out an integrated inventory solution that joins business intelligence tool.
The Inventory Manager, can share different BI reports and his analysis with management, other managers, end-users and establish metrics, goals so that every user sees and uses the information and be aware of critical issues like stock shortages.
Inventory Aging Report:
Inventory aging helps to drive down stock level, fast moving items, slow moving items and helps to monitor value of money/capital blocked in inventory.
The fact majority of businesses have their capital tied to their inventory. What this means is that the business will delve into an inventory aging analysis too often, there will be a lot of money that cannot be used. Where there is too little inventory, it might cause delay in container maintenance work, repair of equipment, and might cause delay to attend breakdown maintenance calls, which eventually affects heavy loss due to machine/Crain shut down. If the company is caught in-between an inventory balancing act, the company will only take guesses on the types of inventory it requires.
We have to keep in mind that:-
- If we have too much inventory of a particular part, it would block working capital. Increased expenses associated with interest on loans, taxes, insurance and storage costs. Cash will be tied up and thus profits will be stilled.
- If we have too little inventory stock of item which is regularly used, it would end up with the increased occurrences of insufficient stock of inventory for repair and maintenance work.
It’s recommended that one should consider an inventory aging analysis at regular intervals. BI Inventory aging report helps to identify parts which are in stock for a relatively longer period of time.