Whether you run an e-commerce operation or order supplies and products for a physical location, you can save yourself some stress through decoupling inventory. Understanding decoupling alongside other buffer inventory solutions can protect your profits, reputation, and relationship between your business and customers. Explore a few decoupling techniques for everything from stocking electronics to supplement fulfillment with Streamline Fulfillment below.
Understanding Decoupling Inventory
Decoupling inventory refers to the practice of setting aside extra raw materials or specific components in case an event triggers a shortage. It protects your business’s internal supply chain resilience, ensuring you meet buyer demands no matter what. You might wonder, “Isn’t it just another word for safety stock?”
While decoupling and safety inventory both address demand variability and potential breakdowns, you only use safety stock to manage external issues beyond your control. You implement decoupling for internal variables. For example, you might produce multivitamin supplements for a chain retailer.
You set back individual ingredients in case one of your factory’s production stages breaks down. Your staff can continue making the vitamins past the breakdown stage, ensuring wholesalers receive their orders on time.
Decoupling Inventory Techniques in Action
Success in your business depends on a steady supply of pipeline inventory. You must put back various resources to ensure your pipeline inventory remains full at any given moment. You can implement the following decoupling inventory techniques to protect your manufacturing output:
- Recognize demand patterns: If you manufacture laptops, for example, you might notice a demand influx when school begins and winter holidays occur. You could increase your decoupling stock throughout slower seasons to meet high-demand periods.
- Assess current inventory: How much inventory have you already put back? Ensure other types of extra stock, like safety inventory, have enough materials alongside your decoupling holding.
- Fill and replenish decoupling stock: You’ll inevitably encounter circumstances that require you to dig into your decoupling stock. Strategize how to use and replenish it once you resolve the problem.
- Adjust your inventory as needed: Perhaps your multivitamins or laptops become the hottest purchase due to a prominent influencer’s recommendation. Keep your finger on the pulse of customer demands beyond your busiest seasons.
How Decoupling Inventory Benefits Your Operation
As a manufacturing supervisor, you likely already know that having extra components, raw materials, or finished products protects your business interests. However, you might discover other, more subtle benefits like:
- Adaptability to demand variability: Demands can rise and fall abruptly. Preparedness prevents damaging disruptions.
- Higher efficiency and resilience: You’ll keep each production stage independent of the others. You can churn out completed products more readily with independent manufacturing stages.
- Lower inventory holding costs: Finished goods take up more space than raw materials or small components. Therefore, storing parts, materials, or ingredients costs less.
Decoupling strategies help your business run more smoothly in the face of various unpredictable circumstances at the internal level.
Streamline Fulfillment Helps You Master the Supply Chain
Decoupling inventory is just one of many fulfillment techniques we recommend. Streamline Fulfillment offers other supply solutions, like third-party warehousing. Call 509-888-2880 to connect with us and improve your production approaches.