GST seeks to unify the entire country into a single market with only one value-added tax levy on all the goods and services across states at the point of consumption, subsuming up to 16 different taxes and levies that were imposed. This is expected to make the movement goods across the state borders smoother, faster and easier, though some experts have raised concerns over the complications that could arise out of a multiple tax-slab structure.
However, managing inventories during this moment of change has got real challenging. In today’s era of changes in the tax system, inventories in the supply chain pipeline can make or break the situation for any business. As it is said, it the supply chains which compete and not the organizations! Hence tracking and maintaining optimum inventories is critical and also it is difficult to estimate where, what, how much is required. Over stocking has issues with blocking the working capital and under stocking has huge risks of opportunity loss attached to it.
Inventory Management Consultants of Faber Infinite Consulting has worked closely with a client struggling with inventory management and implemented an accurate and fitting Inventory Management Module based on scientific calculations developed by the team Faber Infinite. This system is capable of equipping the client to understand the current inventory situations, future state of inventory details, proposed savings in each component, what needs to stored and most important in what quantities.
With this inventory management system in place, the impact of GST on the distribution business has been minimum. It can be attributed to having right and optimum stocks in the pipeline. The scientific inventory management module is industry neutral and has capability to resolve supply chain and inventory issues from the root in any organization. It also assists in deciding how much to order and when to order. The system takes care of inherent delays attributed to either supply uncertainties or demand variations upto 2 sigma levels – which is capable to cover 95% of the variations. With the Kanban system implemented, the system gets more flexible, responsive and agile now. Reduction in wasted efforts / wasted time, the unnecessary time wasted in searching and managing excess inventory comes as cherry on the cake.
The overall savings in inventory value for the said engagement (after implementation of inventory management module) is a mix of positive and negative savings. Positive saving is achieved by controlling over stocking while negative savings results are to avoid under stocking.
Team Faber can help the clients across industries and geographies to have systems in place that are futuristic.
Written By Faber Mayuri Pandya