Self-Healing Inventory?
Publisher,
Inbound Logistics
Self-healing inventory is a phrase that is being used more and more these days. It’s a take-off on the concept of a self-healing supply chain, where inventory comes alive and knows where it has to be without you always lending a guiding hand.
Inbound Logistics promotes the enterprise concepts that enable you to efficiently and tightly match your inbound supplier flow and static inventory to your demand signals. The next iteration of that business philosophy is an inventory management strategy that autonomously detects where your inventory needs to be and where your inventory should be to match current and future demand.
Amazingly, this is mostly accomplished without people quarterbacking the process. So when you experience inventory “injuries” your self-healing inventory system slaps on some antiseptic and a band-aid to heal the wound without you even knowing about it (unless you want to).
A self-healing inventory system proactively identifies potential issues before they escalate, rather than simply reacting to problems such as stockouts. It achieves this by leveraging real-time data, advanced analytics, and artificial intelligence/machine learning to anticipate disruptions. This involves continuously monitoring factors such as previous inventory data, demand patterns, supplier issues, shipping delays, weather interruptions and warehouse friction.
It also anticipates potential issues through the power of real-time data, advanced analytics, and AI/ML not only to resolve upcoming issues should they arise, but also to predict demand even before it materializes.
Here are some of the decisions a self-healing inventory system can make:
- Increase supply orders to match a demand spike.
- Switch to your alternate suppliers should one be unable to fill your orders.
- Speed up or slow down your inbound orders based on need.
- Move to expedited shipments to match inventory levels and business rules.
- Rebalance your inventory between locations.
- Learn from past events and the effectiveness of prior healing actions on a continuous feedback loop, making it smarter every day.
Another benefit is the impact on growth. The right orders in the right place before the right time at the right price—at the lowest possible inventory investment cost—amplify customer satisfaction while focusing on efficiency.
This approach is very effective in fast-moving inventory environments, understandably making companies such as Walmart and Cardinal Health take the lead in a self-healing approach to supply chain.
Cardinal Health? Of course. It is a self-healing operation, after all.