As an art and a science, managing inventory requires agility, anticipation, and thorough planning. strategic inventory management is the best approach to anticipating your future needs while considering the best course of action for your current inventory.
Here are six ways an independent distributor can help you manage inventory.
1. Inform purchasing decisions
Access to real-time inventory data allows you to make decisions based on the most up-to-date information (such as those provided in A2’s monthly market update). With shifts between having excess inventory and market shortages, having a partner with access to a global network of suppliers guarantees the broadest view of component value.
2. Show potential ROI on excess inventory
Using rich market and historical data, an independent distributor can help you to effectively predict investment returns. An expert-driven program will include a comprehensive assessment of your excess inventory with recommendations on the quickest way to maximize inventory value recovery. Data analytics tools will help you identify RFQ commonalities across all vertical markets to effectively sell excess electronic components to a global customer network.
3. Drive highest return by accessing buyers globally
When you partner with a global independent distributor you get access to buyers across the world, allowing you to move surplus inventory across a wider buyer network. Holding on to excess inventory longer than necessary hurts your bottom line, takes up warehouse space, and increases operational costs. The ability to move excess inventory quickly helps to mitigate these risks.
4. Identify future risks
Longer lead times have now become more common, creating higher on-hand and in-transit inventory—ultimately limiting agility and stymying response to supply chain uncertainties. Since on-hand and in-transit inventory make up a large chunk of total costs, working with an independent distributor to determine need, market demand, and lead time variability is necessary for responsive supply chain management.
5. Analyze year-end financials
To make the most of any opportunities for profit, as well as mitigate areas of risk, consider adding regular inventory value assessments. As inventory is a liability, it is in your best interest to lower values before year-end closing. Conversely, any inventory that may not be utilized in an upcoming build can be reviewed for disposition.
6. Create customized solutions
With the current transitional market, it can be difficult to know which product lines continue to have allocation issues and which do not. In order to avoid dispositioning parts that may be in shortage later, it is important to work with a partner that uses multiple points of data such as part parametric, market demand and supply availability.
A key link in the electronics supply chain market, distributors work to ensure customers receive the components and parts they require. More than “middlemen,” independent distributors provide technical expertise, value-added services, as well as quality components. By leveraging your relationship with a proven partner, you can prepare for unexpected shifts in the market and effectively manage your electronic component inventory.
Read more:
Finding a sweet spot: the risks and rewards of sourcing electronic components globally
Boom, bust, and the global expansion of semiconductor fabricators