DRP Benefits
An inventory management system such as DRP offers a number of benefits for management. The major organizational beneficiaries include marketing and logistics.
The major marketing benefits are:
- Improved service levels that increase on time deliveries and decrease customer complaints.
- Improved and more effective promotional and new product introduction plans.
- Improved ability to anticipate shortages so that marketing efforts are not expended on products with low stock.
- Improved inventory coordination with other enterprise functions, since DRP facilitates a common set of planning numbers.
- Enhanced ability to offer customers a coordinated inventory management service.
The major logistics benefits are:
- Reduced distribution center freight costs resulting from coordinated shipments.
- Reduced inventory levels, since DRP can accurately determine what product is needed and when.
- Decreased warehouse space requirements because of inventory reductions.
- Reduced customer freight costs as a result of fewer back orders.
- Improved inventory viability and coordination between logistics and manufacturing.
- Enhanced budgeting capitability, since DRP can effectively simulate inventory and transportation requirements under multiple planning scenarios.
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