External inventory

What is meant by External inventory?

The term "external inventory" refers to stocks of goods or materials that are not stored within a company's own warehouses but are held by external service providers, such as logistics companies, suppliers, or consignment warehouses. These external inventories must be managed and monitored within the company's software to ensure accurate inventory control and planning.

Typical software functions in the area of "external inventory":

1. Real-Time Inventory Monitoring: The ability to monitor and update inventory levels at external warehouses in real-time.
2. Automated Inventory Reconciliation: Regular reconciliation of internal and external inventory data to avoid discrepancies.
3. Inventory Tracking: Tracking the movement and current location of inventory in external warehouses.
4. Integration with Supplier Systems: Connection to external service provider systems to seamlessly import and update inventory data.
5. Reporting: Generating detailed reports on inventory held in external warehouses, including availability, movements, and storage times.
6. Alert and Notification Functions: Automatic notifications for inventory shortages or unusual movements in external warehouses.
7. Cost Tracking: Monitoring and assigning costs associated with storing inventory in external warehouses.
8. Planning and Forecasting Tools: Supporting planning and forecasting needs based on inventory levels in external warehouses.
9. Order Processing: Managing orders and shipments directly from external warehouses.
10. Access Management: Controlling who within the company has access to the inventory data of external warehouses.

Examples of "External Inventory":

1. Consignment Stock: Goods stored at a customer or supplier's site and only added to inventory upon consumption.
2. Logistics Service Provider Warehouses: Inventory stored in the warehouses of an external logistics service provider.
3. Distribution Centers: Inventory located in regional distribution centers before being delivered to the end customer.
4. Customs Warehouses: Goods stored in a bonded warehouse before being added to regular inventory.
5. Supplier Production Stock: Materials still held at the supplier's site, intended for manufacturing.
6. External Safety Stock: Additional inventory held by external partners as a safety reserve.