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56 SMT007 MAGAZINE I NOVEMBER 2022 Feature Article by Michael Ford AEGIS SOFTWARE Inventory management should be simple; aer all, it is how many of us learned to count. ERP solutions have become complex yet can- not solve our immediate supply-chain and manufacturing challenges unaided. It's time to unfold the root-causes behind key issues and reveal the secrets for success in modern inven- tory management which have a significant impact on any manufacturing business. To understand modern inventory manage- ment, we should start at the beginning, which is actually at the end. e aim of the manu- facturer is to get rid of completed products as soon as possible. Whether it's an OEM or EMS company, the customer has agreed on price, so it's time to get paid and free up that warehouse space. Customers of completed products were once eager to take them into their distribu- tion chain, turning their investment into cash while completing the journey to the final cus- tomer. However, once there, products gener- ally depreciate over time, value-wise, whilst still accumulating costs associated with logis- tics and storage throughout the distribution chain. While this is shorter, it's an altogether significant threat to profitability. Distribution chains have now become shorter, designed to cope only with any expected fluctuations in supply and demand. With rampant inflation in many markets— fueled in part by the perceived shortage of products and materials, as well as changing customer demand patterns in many cases— the value of finished goods is appreciating. is is an extremely dangerous condition, as competing vendors now choose their timing Modern Inventory Management Secrets

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