![]() ![]() ![]() In supply chain management, there are three types of inventory: Inventory is a major asset on the balance sheet for most companies, and inaccurate reporting can lead to stockouts or wasted inventory. Inventory management is important because it helps a business keep track of stock on hand and identify when there’s a shortage.īy keeping stock, both retailers and manufacturers can continue to sell or build items. Inventory is the accounting of items, parts, and raw materials that a company uses in production or sales. ) What Are the Three Types of Inventory in Supply Chain Management? A company’s extra inventory is identified as decoupled because a manufacturing line with interdependent (or coupled) processes will reserve inventory at each leg of production (also known as decoupling points. In short, it’s a method of reducing risk by separating inventories.Ī manufacturer will set aside decoupled inventory to ensure purchase orders remain fulfilled on time even in the event of possible disruption. What is Decoupling Inventory?ĭecoupled inventory is when inventory, or finished goods, are separated from incoming raw materials, which are used to make those products. We’ll also take a look at some alternative ways to prevent stockouts from eating away at profit margins. In this blog, we’ll explore what decoupling in the supply chain is and how it can help provide a cushion against supply chain issues. All of these disruptions can, if not accounted for, cost a business time, money, and ultimately customer satisfaction. Fluctuations in demand and unforeseen disruptions in the supply chain are a few of the issues that affect a company’s ability to get the product they need when they need it. ![]()
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