Monday, September 9, 2013

Cross-functional Impact on Inventory Management

The idea mentioned in "Ten Ways to Improve Inventory Management" that multiple departments within a company should determine the inventory level together rather than relying on the sourcing department triggered my interest in this topic. I found an interesting article that compares this cross-functional impact on inventory management to the relation of spokes and middle hub of a bicycle. Evidently, the inventory management is the hub, and interaction with other departments is the key to success of a company's inventory management.

While it is universally acknowledged that inventory management is dependent on the joint efforts of sourcing, production, finance, merchandising and distribution center, its reliance on marketing and creative may have been neglected to a certain extent. In addition to the impact of Marketing Department has on inventory when conceiving huge marketing campaigns, which was mentioned in Bain & Co.'s article, vice versa, Marketing should also be informed of inventory changes, so that pricing strategy and marketing forecasts could be adjusted in time.  Working with creative team on catalog preproduction and assuring the accuracy of information conveyed to customers will build a solid foundation for a satisfactory customer experience, and from my point of view, helps avoid unnecessary lawsuits in the future due to inaccuracy of information.

The author also stated that it is necessary for inventory management personnel to take inbound phone calls at Contact Center to know better about what's going on. Personally speaking, I think it's a little bit overboard. Although daily cross-department communication is absolutely a must for successful inventory management, each department should focus on what it is supposed to do, so that the overall company can strive to success with joint efforts.


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