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Inventory Management and how it differs from IT Asset Management

Inventory Management and how it differs from IT Asset Management

Inventory Management.

 

Two simple words that can mean many different things. Classic inventory management is ultimately about selling, the life blood of any business. Having the right thing, in the right place at the right time, so when your customer wants to buy, they can. But how do you make sure you have exactly what they need? Ensuring there is just enough in stock to meet demand, without taking the financial hit of having more than you can profitably sell? How do you know what is actually selling, when demand is rising or as importantly, falling? How do you optimise your cash flow, getting the fastest return on your money? The answer lies in effective inventory management!

 

What is Inventory Management (IM)?

Inventory management is the process of effectively creating, ordering, storing, and selling goods and services. Inventory management helps a business identify how much stock to order and at what time. IM tracks inventory from purchase of the component parts to the sale of completed goods. An effective IM system will identify and respond to trends, ensuring there is always enough stock to fulfil customer demand as well as flagging up a potential shortage.

Inventory management will vary by industry. Manufacturing companies need to ensure the correct level of raw materials to allow them to create products. An oil company may be happy to hold completed goods, for example petroleum, for a long period of time, whereas a business selling clothing will want to ensure they can meet the new season’s demand, without having stock left over as the weather changes.

 

What is IT Inventory Management?

When it comes to Information Technology, inventory management is about ensuring the timely and cost-efficient availability of new equipment, as well as spares and replacement parts for installed systems. This is particularly important during the implementation of an IT roll-out, or service migration.  For installed systems, the provision of quickly available spare parts, disk drives, server boards, networking equipment etc, is vital to ensuring that an appropriate level of service can be delivered, in line with business objectives.

 

Why is Inventory Management Important?

Simply put, inventory management can make or break a business. Inventory is often one of the largest items on a balance sheet and failure to manage it effectively can lead to losses, even business failure. Too much stock can cause cash flow issues, too little and a business loses out on sales and creates customer dissatisfaction.

In some businesses, where hazardous materials or consumables are amongst the items, there will be a specific legal requirement to manage inventory effectively and transparently. In the USA, all public companies are required to track inventory for compliance with Securities and Exchange Commission (SEC) rules and the Sarbanes-Oxley (SOX) Act.

In the context of IT, effective inventory management ensures that the right products, components, replacement parts and consumables are in the right place, ready to be deployed quickly as required.  Doing this in a cost, space, and resource efficient manner.

What is IT Asset Management (ITAM)?

IT Asset Management (ITAM) is a set of business practices and processes designed to manage the total lifecycle and inventory of an organisation’s IT assets, from planning, procurement, deployment, maintenance, to retirement and disposal. ITAM involves using financial, contractual, and inventory data to help a business or organisation make the right decisions at the right time, ensuring that the assets are used effectively and efficiently. This includes the tracking of software licences, ensuring that equipment is at the right OS or patch level and that proactive maintenance is carried out as required.

There is an overlap between IT inventory management and ITAM. For example, an inventory management system should know about the IT assets that need to be deployed, the components needed for scheduled upgrades and the requirement for replacement assets in case of a deployed asset failing.

 

IT Inventory Management-as-a-Service and the Channel

The IT department of a business or organisation rightly expects a great level of service from the channel. Helping to roll out new products, install new systems and assist with upgrades and routine maintenance. As part of their internal inventory management or ITAM systems, customers may ask their channel partners for services such as dedicated stock to be held, or hot-swap spares for legacy systems, to be available quickly in the case of an outage.

Supporting customers in this way requires a channel business to have the right inventory management systems in place, distinguishing their own internal and project needs, to those of their customer base. As the number of customers grows, so does the management complexity and indeed space and resource required. This in turn increases both the cost and risk of providing inventory management services to end user customers.

One way to overcome this issue, and provide your customers with a better service at a lower cost, is to use inventory-as-a-service.  This provides greater economies of scale, with the provider taking full ownership and responsibility for various functions that help to streamline inventory processes and lower operational costs. Services can include a fully operational, 24/7 service desk, global service locations giving faster response time levels, inclusive courier services and the holding of on-site spares or management of customer-owned stock, for the duration of a contract. By using an inventory-as-a-service provider who is dedicated to the channel, a channel business is able to maintain the primary client relationship, and sell the service as part of their own portfolio of offerings.

 

How can SCT help?

Inventory management is vital for any channel IT business. Knowing what your customer needs is the first step to sales. Ensuring you can deliver the complete solution and support during the full lifetime of a project, turns it into a profitable long-term relationship. Knowing you can rely on the availability of a partner’s inventory is as important as managing your own.

When it comes to rapid-response IT hardware replacement and spares, SCT’s Smart Inventory-as-a-Service solution, provides a complete end-to-end managed facility for voice and data networking equipment. This enables you to easily and efficiently arrange delivery of IT hardware and spare parts, whenever and to wherever you need them.

Our objective is simple, to deliver greater efficiencies and performance gains, above and beyond our customers’ existing operations. We achieve this by taking full ownership and responsibility for various functions that help to streamline processes and lower your operational costs. This includes a 24/7 service desk, a global network of forward service locations, dedicated couriers, and access to complementary services, such as on-site spares or management of customer-owned stock, for the duration of a contract.

If you would like to find out more about how SCT Global Services work with the channel, to help you provide the best possible service to your customers, please get in touch. We would love to hear from you.

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