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s01e04 inventory

things get messy

· s01-logistics101,theLMNpodcast

Inventory is critical and something which a lot of people talk about, you need inventory in order to have goods to sell, but having inventory costs money. But then it gets slightly more complicated because along with the general need for inventory there are different types of inventory: there are goods which are short term (like Banana's), progressive inventory (also known as many other more correct terms: overall it means stock used in the production of something, a contributing component, like rubber for a tyre manufacturer), and there is also long term inventory which lasts a very long time (for example a desk).

Ideally you want to hold as little inventory as possible but have the optimal amount to service customers, as stated earlier, inventory costs money, so holding less of it lowers your holding costs. Where holding cost is the cost to store a desk in your warehouse before it gets sold, since holding onto a desk still costs money in rent, labor to move it around, there is also the increased risk of it being damaged while in stock.

The trick with inventory is that its quiet complicated to manage in the bigger picture, it doesn't just exist in a warehouse, it exists throughout the whole supply chain. Whether its in transit from overseas, on the way to a customer interstate, in a warehouse or in a customer facing store. There are many ways to manage inventory, luckily we have more and more technologies coming out which help accomplish inventory management by looking things like data and using that data to be able to forecast trends.

All of this and more is discussed in the below podcast, if we missed something, please get in touch!

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