Factor Influencing Inventory Management on Minimizing Cost with Reference Through Business Analysis in Amazon India: Case Study

Abstract

A key concern for global manufacturers today is reducing inventory and inventory driven costs across their supply and distribution networks. Pressure to cut inventories continues to build for several reasons. Manufacturers no longer manage linear or stable supply chains. They juggle vast supply networks. Globalization of the supply network and supply base drive higher inventories and make cutting inventory more difficult. Globalization among consumers is putting pressure on product availability, prompting manufacturers, distributors and retailers to upgrade their stock keeping policies. Emerging market consumers are becoming as demanding as those in developed markets. These challenges are exacerbated by manufacturers’ own product development decisions. The drive to innovate and increase the rate of new product introductions leads to high rates of new technology adoption for next generation products, putting enormous pressure on inventory management across extended supply chains. In this context, manufacturers have difficulty reducing inventory with traditional or even advanced inventory management techniques. Today’s global manufacturers have largely hit limitations in leveraging material requirements planning and management processes and systems to cut inventories. Even advanced inventory management techniques, such as sales and operations planning or developing demand-pull replenishment systems with suppliers, have been either embraced or found to deliver less impact on overall inventory reduction than anticipated. In the last few years, a new paradigm has emerged: where one finds operations teams and planning teams of the manufacturer applying the latest techniques and technologies to improve inventory visibility, control and management across the extended supply network.