Why are stocks becoming a strategic asset in an uncertain world?

Inventory is no longer just a cost, but a strategic lever in the face of uncertainty. Agile, proactive and distributed management helps secure the supply chain and strengthen business resilience.

In recent years, the supply chain environment has undergone major transformations due to significant exchange rate fluctuations, global logistical disruptions and successive crises such as COVID-19 and the war in Ukraine. These upheavals have prompted many companies to quickly adopt measures to secure their inventories and thus avoid disruptions and sudden cost increases.

Historically, stock was often seen as something negative that needed to be reduced at all costs. However, in today's environment, marked by constant uncertainty, stock needs to be re-evaluated and recognised as an essential buffer against unpredictable market and production fluctuations, and as vital to the smooth running of a business.

However, isolated and ad hoc decisions can lead to a lack of flexibility, increasing the risk of surplus. Monstock therefore recommends strategic inventory management that is clearly defined and agile, to respond to fluctuations in supply and demand while ensuring optimal protection.

Clarifying responsibility for effective management

Inventory management naturally raises questions of responsibility. Quick and bold decisions cannot be made solely at the operational level. In times of VUCA uncertainty (volatility, uncertainty, complexity and ambiguity), it is essential to clearly distinguish between the strategic responsibility of management and operational responsibility on the ground. This ensures both responsive and effective decision-making and continuous improvement through the PDCA cycle (Plan, Do, Check, Adjust).

Accurately determine the necessary stock levels

Supply risks can be classified into four main categories: delivery, cost, quality and sustainability. It is essential to analyse these risks thoroughly based on the specific characteristics of the materials and suppliers in order to prioritise storage wisely.

Materials that pose a high risk in terms of delivery and cost, are difficult to substitute or are critical to production should be prioritised. Criteria such as the novelty of the component, its functional impact on the final product or the special processes required for its manufacture should guide these decisions.

Adopt a strategic approach to storage

Beyond simple on-site storage, it is advisable to plan for several storage points strategically located throughout the supply chain. The idea is to ensure optimal availability while maintaining a high degree of flexibility in the face of rapid change.

The versatility of materials is a key strategic factor: the further up the supply chain you go, the more versatile the materials and components become. In times of crisis, the ability to quickly adapt components to new products or processes is essential.

Simulate risks and predict the unpredictable

Traditional calculations based solely on past data are no longer sufficient to guarantee good inventory management. Monstock now encourages a proactive approach by anticipating emergency situations through simulations. For example, for semiconductors or electronic components, it is important to simulate the time required for the validation and integration of alternative solutions.

Similarly, if your supply chain is heavily dependent on a single supplier, simulating the time needed to identify and validate a new supplier is essential to securing production.

Anticipate to better secure

At a time when supply chains are becoming increasingly complex and unpredictable, strategic inventory management is no longer just desirable but absolutely necessary for the survival and sustainable growth of businesses. By adopting the best practices recommended by Monstock, you will be able to manage your inventory in a more agile, secure and profitable way, even in the most unstable situations.

Monstock helps you turn your inventory into a real strategic asset. Thanks to agile and intelligent management, our solution enables you to anticipate risks, secure your supplies and guarantee business continuity, even in uncertain times.

To learn more about strategic inventory management and discover our other use cases, click here. 

For more information: contact the Monstock team.