Managing Inventory to Enable Agility – A Distribution Report

New 2020 Report from ChainLink Research and NetSuite

Read Time: 3.5 min.

Inventory is the lifeblood of manufacturers, brand owners and wholesale distributors. Poor inventory management can tilt the scales, and not in your favor. Maintaining the inventory balancing act is what drives your sales, increases your profitability, boosts cash flow and secures customer loyalty. One isn’t successful without the other. Deep dive into your inventory management with this ChainLink Research report and examine:

  • Challenges and Opportunities of Managing Inventory in Volatile Times
  • Accurate Inventory Visibility is Foundation
  • Inventory Management Strategies
  • Big-Business Inventory Capabilities for Small Businesses
  • Inventory Management is Vital for Manufacturers and Distributors


Read our summary below and download the full report for more information.

Challenges and Opportunities of Managing Inventory in Volatile Times

Balance is key. The more moving parts involved in a project, the more difficult is to keep them all in line. By combining the right items, at the right place, during the right time, with the right quantity – it’s common for imbalance in inventory to occur.

In addition to all the intricate moving parts of the project, COVID-19 has introduced a new level of difficulty to forecasting inventory patterns. From the dramatically increased rate of consumption to persistent panic buying, the shortage of products such as toilet paper, hand sanitizer, masks, and gloves has proved to be extremely difficult to predict inventory levels. Simultaneously the closure of businesses and distributors resulted in an extreme cutback in demand. Despite the extreme example of COVID-19, inconsistencies in demand is typical.

Even if the right items and the right quantity is acquired, the location of this inventory is crucial. Online buying has been an extremely integral business strategy that organizations have learned even more harshly through COVID-19. Despite these times, timely deliveries are of the utmost importance in order to maintain customer loyalty. Having the right tools, processes, and SKUs is difficult to get right, but they prevent overstock and undersupply across multiple warehouse locations.

Accurate Inventory Visibility is Foundational

In order to be accurate and agile, continuous inventory management processes and a single company-wide system control point must be in place. Having real time and up-to-date inventory visibility should be at the base of every inventory management system. Accurate data allows for optimal replenishments and agility over stock levels across each location. Consider inventory management software to eliminate mistakes that can come from manual processes.

Visibility into inventory outside direct ownership and control is even more necessary – this goes for both the supply and the demand side. Global growth makes it more difficult to see outstanding POs, estimated shipment times, and delays. This goes for times of disruption, as well. Utilize intelligence to drive agility through faster response times, smarter decision making, and catastrophe prevention.

For multi-tier distribution channels, utilizing demand-side information is extremely productive for accurate forecasting. Doubling down on sell-through rates and inventory amounts per channel is key to ‘clearing out the channel.’ The only consumption that truly matters in the supply chain is the end customer consumption.

Inventory Management Strategies

The big predicament organization face is to prioritize on service levels or inventory levels. While some find value to always have inventory on hand in preparation or any situation, others with a reasonably predictable demand may strategize minimal inventory levels.

There are always opportunities to improve service inventory tradeoff, no matter where an organization is on the spectrum. Through a combination of the following, this can be accomplished*:

  • Accurate SKU-location inventory data
  • Improved forecast accuracy
  • More accurate lead times
  • Shorter lead times
  • Kanban/Just-in-Time
  • Inventory optimization

Business Inventory Capabilities for Small Businesses

When it comes to modern inventory management systems, small businesses can access and implement them in addition to big corporations. It all comes down to adopting the right combination of partners, systems, processes, metrics, and training. In fact, modern cloud-based offerings have proved to be just as valuable to small businesses as they are to much larger competitors.

A single, unified system eliminates system integration issues. A common database allows for handoffs to be done automatically with no latency and consistency throughout the data. Each side of the business is able to share inventory data with real time results.

Automation can be extremely helpful, while simultaneously serve as a strict requirement. Maintain visibility outside of the business through*:

  • EDI
  • Supplier and Customer Portals
  • External Inventory Locations/Accounts
  • API Integration
  • Supplier or Channel Network


When looking for a solution, there are some things to consider*:

  • Replenishment algorithms, optimization, and auto-execution
  • Demand-supply alignment
  • Single database for inventory
  • Industry-specific blueprints
  • Simple, future-proof customizability and extensibility
  • Rich network of well-integrated partner applications
  • Scalability


*ChainLink Research 2020

Inventory Management is Vital for Manufacturers and Distributors

It’s even more crucial now to have good inventory management and accurate inventory data to see success. It’s a balancing act, but once you have the right products, in the right place, at the right time, in the right quantities – increases in profitability, cash flow, and customer loyalty will follow. When demand erratic and supply levels are infrequent, dive deep into your strategy and process disciplines. In addition, take this time to make sure risk management strategy is in place and foolproof. Mastering excellence in inventory management will not only get you through these challenging times, but flourish during the good times.

Download the Report: “Managing Inventory to Enable Agility for Manufacturing & Distribution Companies"