Controlling the inventory is part of Supply Chain management. For preventing inventory stock out situations sufficient inventory need to be maintained in the supply chain. This is crucial as if at any time insufficient inventory occurs the customers will move out to competitors and getting them back will be a tedious process. Â Things like poor forecasts and the fluctuations in the inventory need to be considered while stocking the inventory in supply chain. In the case of Supply Chain Management, there are factors in the logistics apart from manufacturer and suppliers.
The various process involved in the Supply Chain Management is expensive and complicated at the same time. The components in the supply chain depend on each other and maintain the continuous flow of money and materials. The real value of the product is calculated once the customer is satisfied.
The Theory of Constraints solution establishes advantage when there is more availability of stock or dramatic reduction due to damages when the flow of the materials and components is interrupted by shortage or surplus. Along with Theory of Constraints, the delay in time after the consumption which is followed by the delivery also needs to be considered in Supply Chain Management.
The inventory stocked at the locations need to be monitored by setting an upper limit which will be closely related to the maximum amount of consumption within the prescribed time frame. This also ensures that no additional inventory is made and stored which is more than the required levels.