We all love a seamless shopping experience. Go to a store, buy what we need, pay, and walk out. But ever wondered, behind this seamless shopping experience is a world of complex yet fine-tuned inventory systems that ensure all the products are in stock and on time!
In the world of instant gratification, it is essential for companies to be on their toes and keep their products available all the time. Else, competition will eat the space and profits. Oracle fusion cloud inventory management is a power an AI-powered SCM module that supports companies in managing the flow of goods such that they are neither overstocked nor out-of-stock.
Considered the keystone of a successful business, inventory management ensures a balance of meeting customer demand and minimizing costs. In this blog, we will discover the benefits of implementing oracle inventory management, its role and importance, and how it can transform businesses.
What Is Inventory Management?
Inventory management, in simple words, is an effective management and control of ordering and storing raw materials, tracking items in production, and finally getting the finished goods into the hands of customers. Yet, inventory management is more than just counting boxes and keeping them stocked. It is a vital component of business operations that ensures production flows smoothly, keeps customers happy, and maintains well-stocked shelves – without tying too much capital or running out of stock. It ensures the right products are available at the right time and optimizes the supply chain to meet customer demand efficiently.
Per this research, 71% of the companies use inventory and warehouse management to track the inventory accuracy rate, 67% follow inventory turnover rate, while 54% monitor on-time and in-full inbound receipts.
Types of Inventory Management
Inventory management can be largely classified into three categories:
1. Raw Materials/Components:
In this type of inventory management, companies purchase and store items until needed for production. This type ensures the right amount of raw material is available to maintain a smooth production process.
Example: A car manufacturer buys and stocks different parts like aluminum, steel, tires, frames, and other parts so that they are quickly available at the time of production.
2. Work in Progress (WIP)
In this category, inventory management tracks and manages the material/items that are currently in various stages of production but are not yet completed and ready for sale. An effective WIP inventory management ensures the engine is ready to be moved to the next stage of production i.e., transitioned to the assembly line for installation, thereby, preventing production delays.
Example: A car manufacturer assembles an engine in the vehicle, but it is not yet installed.
3. Finished Goods
This type of inventory oversees the storage and distribution of completed products that are ready for sales.
Example: In a car manufacturing process, fully assembled cars are stored such that they can be easily tracked and promptly transported to the dealers.
Why Is Inventory Management Important?
Statistics Speak
- Overstocks can result in a loss of $471.9 billion while out of stocks can lead to $634.1 billion loss
- 37% of businesses report increased profits due to effective inventory management
- 60% of businesses use advanced inventory tools to manage surging e-commerce demands
- ~$1million savings for large organizations by reducing 1 day inventory
- ~4% increase in margin can be achieved by decreasing out-of-stock situations
How Can Oracle Fusion Cloud Inventory Management Help?
Oracle Fusion Cloud Inventory Management is a cloud-based solution that gives complete visibility and control goods flow across a company and its global supply networks. The key features of the solution include:
This feature helps companies gain real-time visibility across the company, optimize the material flow, and improve decision making.
- Optimizing Material Flow: Oracle inventory management enables enterprises to automate, streamline, and optimize material flow not just within the company but across its supply chain. Meet your customer demand quickly and maximize revenue potential.
- Real-time Insights: With Oracle Inventory cloud, gain actual, ongoing insights not just into inventory – internal and external, but also goods that are in transit. Based on the inputs, fulfill orders from anywhere and at any time.
- Dashboards for Smart Decisions: Oracle provides an all-inclusive dashboard that helps companies monitor and manage the status of incoming and outgoing material flow.
This feature of Oracle cloud enables companies to go a step further than managing stocks. It helps enterprises optimize inventory, maximize revenue, and enhance customer satisfaction.
- Revenue & Customer Goals – The cloud-based solution helps companies to determine the exact requirement of goods at different stocking locations and achieve the target service levels, meet customer demands, and increase buyer satisfaction. This in turn helps companies effectively manage working capital and meet revenue goals.
- Automatic Reorders: Oracle helps companies set up automatic reorders based on the actual consumption. When stock levels dip below the minimum requirement, it auto-generates a refill order and stops at the maximum level. Similarly, for complex and large-scale operations, Oracle helps companies run a smooth inventory.
With this Oracle inventory feature, companies can effectively manage their costing, profitability, intercompany transactions, and receipt accounting.
- Costing Clarity: Get an actual picture of your costs, including overheads, indirect expense, WIP valuation, and others. This level of precise costing helps you plan your inventory strategically and maximize profits.
- Profitability Powerhouse: Oracle inventory management provides a detailed view of your company’s cost structure and supply chain operations. You can know how much money is going throughout the cycle of material purchase to sale. It also supports different costing methods used by different companies to determine the cost of their products. Additionally, Oracle helps companies track costs even to the most granular level and identify areas of cost savings.
- Seamless Intercompany Transactions: Oracle streamlines intercompany transactions, enabling different departments, locations, and cost centers to operate effectively while making tax-efficient trades.
- Receipt Accounting Made Easy: Manage your incoming transactions with ease. Right from supplier invoices to internal transfers, and trade transactions, gain control of your inventory and costs with oracle. Confidently review, audit, and record changes to costs.
Conclusion
In today’s fast-changing business world, effective inventory management is essential for business success. However, to provide a seamless shopping experience, a well-planned inventory system plays a big role. In this, Oracle Fusion Cloud Inventory Management helps businesses effectively manage, control, track, and audit their stocks for purchase, storage, production, supply, and re-order. Organizations can rely on this AI-powered cloud solution and its innovative technology to future-ready their businesses and drive revenue growth.
From minimizing costs to reducing wastage and making customers happy, Oracle inventory management can ensure the right product is available at the right time and cost. For sustained growth, Oracle offers actual, real-time insights into inventory to avoid stockouts or overstocks and thereby freeing resources and capital for other business needs. Whether you are looking to track the status of goods in transit or the cost structure of each line item at the most granular level, Oracle can be your go to solution. With features like automatic reorders, audits, and accounting, be sure to drive more sales and revenue.
If you are also looking to implement an Oracle inventory management solution, talk to Forsys experts. We are Oracle’s gold-certified partner, specializing in ERP Fusion Cloud Financials and Fusion Cloud SCM operations in the Hi-Tech, Manufacturing, & Healthcare industries.