Best practice in information management series: Inventory stratification
A large maintenance/repair/operations distributor faced some difficult inventory management challenges. Customers were primarily contractors and required next day delivery of parts that often had long, irregular lead times. Forecasting was difficult since customers did not plan and inventories mounted to cover for supplier delivery failures. The large inventories ran a high risk of obsolescence when new products came out or customers changed territories.
The firm decided to build a more responsive inventory control system to manage the obsolescence problem. They built an inventory stratification procedure (ABC analysis) into their ERP system that would govern their purchasing.
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Best practice in information management series: Inventory stratification (88KB)
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