Optimization of Inventory Management using Supplier Evaluation

Abstract

With the focus of many industries being on supply chain efficiency and Inventory effectiveness, there are various factors that play a major role in affecting the outcome for the organization, prioritizing Inventory control, statistically they are bound to be one of the most variate networks in any supply chain of an organization. The reasoning effectively funnels towards the vast network of suppliers involved merged with the staggering market conditions of unique SKU’s that establish unmatched demand with supply

Furthermore, the effect on ineffectiveness of inventory has a crucial cascade, seeping into the financial structure of the organization burning through potential profits that have turned into ashes to be able to never recover.

We plan to establish criteria for an objective evaluation of all suppliers which shall directly/indirectly influence in the organization – quality of the final product, effective usage of inventory, improved inbound/outbound inventory SKU’s and not restricted to improved profit margins induced by the above. Adding further, we also establish assignment of penalties or rewards for the potential low-rated or high-rated suppliers, and to be able incorporate direct audits and improvements with one segment of suppliers whilst terminating relationship with the counter segment of suppliers.