Inventory Migration is a mammoth project exercise involving internal teams as well as many external agencies. Detailed planning, process, simulation and training are the basis to ensure successful inventory migration exercise.
Project Teams would consist of teams from all functional departments namely finance, legal /compliance, inventory planners, IT, procurement, marketing, order fulfillment and logistics & Facilities team and headed by a Project Leader who knows the operational details involved in such a project. A similar project team is required to be setup at the 3PL service providers end too. The project also calls for Project sponsors from management to oversee and facilitate the project decisions.
In this article, we aim to cover briefly the various functions that are required to be planned in a project for inventory migration to give an inside view of the project.
The project planning and execution revolves around the setting of a target date for start up operations from the new facility after migration. All activities originate after this announcement. Normally the transitions should be planned in a lean month or period when the demand on logistics supply chain is likely to be lean and the inventory in the warehouse is at the lowest level.
Marketing, Sales and Order Fulfillment departments would have to announce the plans to the distributors, channel partners and the rest of the players in the chain and plan to increase the stocks at the forward locations to cover up for the period of migration when the supplies are likely to get disrupted. The new location address and details would have to be informed to the markets.
Procurement, inventory planners and logistics will plan for holding required stocks in the pipeline, plan for a lean inventory in the warehouse by shipping out and liquidating stocks as much as possible, stop inbound shipments during the transition period and inform all vendors, suppliers, freight forwarders of the new warehouse location for future transactions.
Legal compliance would entail registering the new facility with the authorities and obtaining the necessary licenses, permissions and clearances from all statutory authorities concerned. This would have to be complied with, both by the company as well as the 3PL service provider in their respective areas of obligation.
Inventory process planning involves three major components. Firstly, the volume of inventory to be transferred has to be estimated, number of container loads calculated. This becomes the input for the rest of the major activities to be planned including transportation planning, resource planning, determining lead times for inventory handing over at the existing warehouse, transit time estimation and time for receiving and put away of inventory at the receiving warehouse.
Process planning would entail following activities at the existing warehouse. Step by step preparation of inventory at the existing warehouse for shipment, sequence of inventory handing over by the existing warehouse for shipping out, process of counting and handing over inventory, handing over documentation and sign off process. The plan should also cover the allocation of necessary resources, teams including supervisory and management staff.
Transport management planning would have to ensure that the transporter provides dedicated capacity and containers as planned without disruption. Sufficient arrangements for loading equipments and teams would have to be planned for. The inventory loading plan should cover details of how inventory would be loaded in sequence and the documentation process. The documents and loading information would have to be passed on to the receiving warehouse electronically before shipment reaches, so that the receiving teams can prepare the systems and teams in advance with the information on what to expect in each container.
The receiving team operations would have to plan in detail to receive shipments, unload, count and put away materials and upload the inventory into the system before declaring the warehouse ready to start operations and serve orders.
IT plays an important and critical role. Detailed planning would entail setting up of new location and transfer of inventory in the system or transferring the existing inventory database to the new service provider. Aspects of location changes, layout changes or process changes would have to be worked out in detail, along with trails undertaken to ensure interfacing and data transfer in sync with the WMS at the new service location. In a migration scene, resolving the inventory discrepancies arising from the transfer and ensuring a hundred percent matching of physical inventory to the new system upload at the new warehouse location with the system at the companies end is most critical to the entire operations.
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