MOST COMPANIES FACE continued SKU proliferation and increasingly complex supply networks. Regulatory pressures, as well as the need to manage inventory obsolescence and warranty costs, are making robust inventory management tools a requirement. At the same time, rapidly increasing supply chain velocity and customer service demands create further pressure to manage inventory management across the supply chain in real time. Only enterprise-wide inventory management systems that provide immediate visibility to all inventory can address these challenges.

Imagine knowing the exact

amount and location of each inventory item in every one of your warehouses and distribution centers. This is a powerful tool for fulfilling orders and ensuring on-time delivery. In fact, companies that automate their processes with inventory management solutions consistently achieve 99.9 percent inventory accuracy, which can save substantial amounts of money from reduced safety stock, obsolete or expired inventory and lost orders. In a manual environment, the economic cost to track inventory when orders are put on hold or recalled is cost-prohibitive, although extremely necessary.

An important ancillary benefit achieved through automated inventory management is that it alleviates many of the accounting challenges faced by businesses that track inventory manually. And the ability to make the best possible inventory decisions can mean the difference between preserving cash reserves, or tying up cash in unnecessary inventory expenditures.

Advanced inventory management solutions provide visibility to inventory across extended supply chain networks, making intelligent sourcing and allocation decisions possible. Orders can be optimally sourced based on user-defined rules, including proximity to the customer, which substantially reduces transportation costs.

For example, if a major retailer is running a special promotion in Southern California and the Los Angeles distribution center (DC) doesn't have sufficient inventory on hand, or inventory that could soon be delivered to cover the special order, you can easily evaluate other options. You may want to consider sourcing from your DCs in Seattle, Denver or Dallas, depending on their available inventories and order volumes, and the transportation times and costs.

Importantly, this visibility extends beyond your enterprise to suppliers as well. If your company is short on components to fill a large order, you can access suppliers' inventory over the Web to determine availability to cover your shortfall. Visibility gives businesses real-time responsiveness and agile operations to more quickly respond to customer needs. One major consumer goods company was able to take three days of inventory out of its supply chain through improved visibility to completed production from its suppliers.