Inventory Accuracy: The Struggle With the Fundamentals
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⇨ Inventory accuracy is the inventory planning metric being used the most by SAPinsiders.
⇨ This metric corresponds to the fundamental capability of inventory visibility.
⇨ Developing robust visibility is the foundation of any best-of-breed inventory planning capability.
SAPinsider will publish a benchmark report on Inventory Management and Optimization in November 2022. There could not have been a better time to conduct research focused only on inventory management and optimization. Why so? Well, the first aspect, which is not surprising to any of us, is the immense focus on supply chain and inventory management that we have seen in the last couple of years. As it applies to critical industries, inventory management is even being discussed in the White House. So that provides an excellent opportunity to explore this topic, to get more insights on this topic for executives so that they can leverage that to harness the energy that has built around transforming inventory management, put it to better use for getting funding, through getting business cases approved and, using that energy positive momentum to transform their inventory management process. In this article, we will discuss why inventory accuracy has emerged as the top metric identified by SAPinsiders in their survey responses.
In one of the survey questions for the research, we asked SAPinsiders to identify the top three inventory metrics that they use. As shown in figure 1, inventory accuracy emerged as the top metric used by SAPinsiders in their inventory management quest.
And it is not surprising that inventory accuracy is the most important metric for SAPinsiders. Timely and accurate visibility in inventory also emerged among the top three strategies for SAPinsiders, as shown in the figure below. It has also highlighted the need for visibility in our recent supply chain research reports like Supply Chain Planning in the Cloud and Process Automation in Supply Chain.
The fact is that while we talk about AI algorithms like reinforcement learning algorithms taking over inventory planning for us, the first aspect that needs to be addressed is developing robust inventory visibility. Whether it is the end-to-end supply chain or inventory management specifically, near real-time visibility is a foundational capability that organizations must build in this age. And that SAPinsider leverages inventory accuracy metric the most highlights how critical visibility is for them.