Inventory Decoupling

The process of inventory decoupling is the act of setting aside of raw materials or materials in various stages of manufacturing to avert shortages should something go wrong. If delivery were delayed due to an equipment or transportation issue, production could come to a standstill if there were not additional supply on hand to tie production over until delivery occurs.

You could also face a slowdown in production if one or more workflows experience a breakdown, due to an equipment failure or labor shortage. If you have decoupling inventory for that stage available, you can continue production while addressing the problem.

You may even want decoupling inventory to facilitate equipment maintenance. If a regular tune-up were to hold up production, it would occur infrequently, if at all. Being prepared for scheduled checkups will keep things running smoothly.

Why is decoupling important?

Decoupling in inventory management is an important process for ensuring business continuity. When you are prepared to handle problems, production can continue at its normal pace allowing you to meet demand while mitigating issues. Decoupling minimizes the impact of external factors, empowering your business with greater control over the outcome.

Decoupling is not employed as a method to manage change in demand, rather it creates an emergency supply to continue filling orders at their current rate.

SOS Inventory software can track your decoupling inventory, as it tracks inventory at all stages from raw materials through production to customer delivery and then returns.

What is an example of decoupling?

inventory decouplingWhen you have a product assembled from many different parts which also require assembly such as a vacuum cleaner, or any type of machine, you may create additional assemblies at any stage to set aside in case something happens to the equipment that creates the vacuum hose or the motor, for example.

When facing supply chain disruptions as we’ve recently endured throughout the pandemic, retaining decoupling inventory is a strategy to mitigate loss and prevent production shutdowns. You stand a greater chance of controlling the outcome from within your own walls than attempting to manage chaos originating from your suppliers.

Naturally, implementing sophisticated inventory software to carefully track and manage every aspect of production and inventory movement is the most initiative-taking step your business can make towards streamlining production and controlling inventory across your organization. SOS Inventory fits the bill with a wide array of software tools to give you the control and insights you need to meet demand and stay profitable. Why not get started today?

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