Inventory management

Inventory management is crucial for B2B account managers since it has a direct impact on customer experience. It involves tracking inventory from manufacturers to warehouses and distribution centers to the point of sale. The goal is to have the right products in the right place at the right time, helping help ensure that customer orders are fulfilled completely and on time.

Effective inventory management includes inventory planning, managing inventory levels, locations, and transaction processing. Some key aspects and benefits of inventory management in B2B operations include the following.
  • Improving forecasting accuracy and reducing inventory obsolescence
  • Managing inventory levels and optimizing inventory allocation to minimize stock outs and overstocking
  • Tracking inventory movement and storage
  • Enhancing supply chain efficiency and reducing costs
  • Increasing sales and revenue by capturing additional demand opportunities
  • Helping ensure inventory accuracy and compliance by performing cycle counts and audits

Effective inventory management helps to build trust and loyalty with customers, which can lead to increased sales and revenue.

Key inventory management features and concepts

The following inventory management features and concepts are interrelated and work together to drive business results and growth.

Inventory segmentation
The process of dividing the overall inventory into smaller, distinct groups or categories, based on specific criteria. Inventory managers typically segment inventory based on criteria such as channels, customer types, priority levels, or product categories. By segmenting inventory, businesses can improve demand forecasting, optimize inventory allocation, enhance supply chain management, and increase sales and revenue.
Segmentation-based allocation
The process of allocating inventory to specific segments based on predefined rules and priorities. Segmentation-based allocation empowers fulfillment managers to define priorities and strategies for distributing inventory across multiple channels. This capability provides for dynamic rebalancing in response to unexpected demand spikes. This process helps to ensure that the supply is directed where it is needed most.
  • Segmentation allocation plans - outline the allocation strategy for each segment. Plans include the quantity of inventory to be allocation, the frequency of allocation, and the prioritization of the segments.
  • Segmentation allocation rules - govern the allocation of inventory into segments. For example, allocating inventory to the segment with the highest demand or prioritizing segments based on profitability.
Segment rebalancing
The process of redistributing inventory across predefined segments to optimize availability and minimize stockouts. Rebalancing is based on either time intervals or triggers from an external system due to changes in supply, demand, or system configurations.
Unsegmented consumption rules
Rules that allow for the consumption of inventory from a shared pool of unsegmented inventory. Unsegmented consumption rules help to define precise inventory distribution ratios. When you define and enable consumption rules, you are providing a way for segmented channels to borrow inventory temporarily from a shared pool of unsegmented inventory. Unsegmented consumption rules provide more fulfillment flexibility and help to capture valuable short-term sales opportunities.
Inventory audit
A periodic review of inventory levels, valuation, and conditions. Inventory audits help ensure accuracy and compliance with company policies and procedures.

The interaction between the key inventory management concepts

Inventory segmentation provides the foundation for segmentation-based allocation, since it divides the inventory into smaller, manageable groups that can be allocated based on specific criteria. By segmenting inventory, businesses can improve demand forecasting, optimize inventory allocation, enhance supply chain management, and increase sales and revenue. You define segmentation allocation plans based on your business strategies. The segmentation allocation plans outline the approach for each segment. You then create segmentation allocation rules that are used to execute the segmentation allocation plans. The segmentation allocation rules help ensure that the inventory is allocated to the segments according to predefined priorities and rules.

When you enable segmentation allocation, the system automatically redistributes inventory across segments based on one of the following conditions: the configured rebalancing frequency, system-detected triggers, or a manual rebalancing initiated through supply synchronization.

To meet short-term demands or capture additional sales opportunities, you might want to invoke unsegmented consumption rules to interact with segmentation allocation rules. Unsegmented consumption rules provide a way for you to use inventory from a shared pool of unsegmented inventory to meet demand.

To help ensure the accuracy and compliance of inventory segmentation, segmentation-based allocation, and segmentation allocation plans, you perform inventory audits. Inventory audits also are used to identify areas that you can improve in your inventory management process.

Other resources

The following resources are available to learn more about the inventory management key concepts and features.

Inventory segmentation
  • For more information about inventory segmentation and inventory segment allocation plans, see Inventory segment. Here you can also see an overview video about inventory segmentation.
  • For information about how to create segments, see Configuring segments.
Segmentation-based allocation
Segment rebalancing
Unsegmented consumption rules
Inventory audit