Network days of inventory (NDI) is a measure of how long it takes for a product to move through the supply chain from the time it is produced until it is sold to a customer. By tracking the NDI for each product, a brewer can plan their production and packaging plans to ensure that they have enough inventory to meet customer demand without overstocking.
For example, if a brewer has a high NDI for a particular product, it may indicate that there is a bottleneck in the supply chain that is preventing the product from moving quickly from production to sale. In this case, the brewer may need to adjust their production and packaging plans to manage their needs. They can work with sales teams to see if there are any sales issues and make adjustments and reduce the NDI. This could involve making changes to the production process, improving logistics, or investing in additional sales and marketing efforts.
On the other hand, if a brewer has a low NDI for a product, it may indicate that the product is moving quickly through the supply chain and that there is a high demand for it. In this case, the brewer may need to adjust their production and packaging plans to increase the supply of the product to meet customer demand and avoid out-of-stocks. This could involve increasing production, adding more packaging lines, or sourcing additional raw materials.
Overall, tracking NDI can be a valuable tool for brewers to plan their production and packaging plans. By understanding the efficiency of the supply chain and the demand for their products, brewers can make informed decisions about how much to produce and how to package their products to avoid out-of-stocks and minimize costs.
How do you calculate your network days of inventory?
Tracking network days of inventory (NDI) involves several different parts, including totaling production inventory, finished inventory, and wholesaler inventory.
To calculate NDI, a brewer first needs to total the production inventory, which is the inventory of raw materials and packaging materials that are used to produce the product. This includes items such as hops, yeast, and packaging materials like bottles and cans.
Next, the brewer needs to total the finished inventory, which is the inventory of finished products that are ready for sale. This includes products that are packaged and labeled, and that are ready to be shipped to customers.
Finally, the brewer needs to total the wholesaler inventory, which is the inventory of the product that is held by wholesalers and distributors. This is the inventory that is available to be sold to retailers and ultimately to consumers.
To calculate NDI, the brewer adds the production inventory, finished inventory, and wholesaler inventory and divides the total by the average daily demand for the product. This provides a measure of how long it takes for a product to move through the supply chain from the time it is produced until it is sold to a customer.
Overall, tracking NDI involves totaling production inventory, finished inventory, and wholesaler inventory to calculate the efficiency of the supply chain and optimize inventory levels. This can help brewers to avoid out-of-stocks and minimize their costs.
How does forecasting play a role in network days of inventory?
Accurate forecasting is important for calculating the right network days of inventory (NDI). NDI is a measure of how long it takes for a product to move through the supply chain from the time it is produced until it is sold to a customer. It is calculated by dividing the total inventory on hand by the average daily demand for the product.
Accurate forecasting is important because it helps to ensure that the average daily demand used in the NDI calculation is accurate. If the forecasted demand is too high, the NDI calculation will be too low, which could lead to overstocking and excess inventory. On the other hand, if the forecasted demand is too low, the NDI calculation will be too high, which could lead to out-of-stocks and lost sales.
Good forecasting can help a brewer to avoid these problems by providing accurate predictions of customer demand. This can help the brewer to make informed decisions about how much to produce and how to allocate inventory across the supply chain. By ensuring that they have the right amount of inventory on hand to meet customer demand, a brewer can avoid out-of-stocks and minimize their costs.
How can poor network DOI management cause brewers out of stock?
The cost of out-of-stocks in the brewing industry can be significant. Out-of-stocks refer to instances when a product is not available for purchase due to a lack of inventory. This can happen for a variety of reasons, such as higher-than-expected demand, supply chain disruptions, or mismanagement of inventory.
When a product is out of stock, customers may turn to competing brands or products, which can result in lost sales for the brewer. This can be particularly damaging for small and independent brewers, who may have a limited product line and may not have the same resources as larger competitors to quickly replenish inventory.
In addition to lost sales, out-of-stocks can also lead to increased costs for brewers. For example, the brewer may have to spend more on marketing and advertising to try to win back customers who have switched to a competitor’s product. They may also have to invest in additional production capacity or supply chain improvements to avoid future out-of-stocks.
Overall, the cost of out-of-stocks in the brewing industry can be significant and can have a negative impact on a brewer’s bottom line. It is important for brewers to carefully manage their inventory and supply chain to avoid out-of-stocks and minimize their potential costs.
The cost of not tracking network days of inventory
In conclusion, the network days of inventory is an important metric in production planning and inventory management. It provides valuable insights into the efficiency and effectiveness of the production process, and can be used to identify potential bottlenecks and make adjustments to improve efficiency. In the beer industry, tracking the network days of inventory can help managers to better understand the production process and make more informed decisions that can improve the overall performance of the production system. This can help to reduce waste and improve inventory management, ultimately leading to increased efficiency and profitability.
Want help tracking network days of inventory?
Craft Portal can help you track the network days of inventory, providing valuable insights into the efficiency of your production process. With the help of Craft Portal, you can easily monitor changes in the network days of inventory over time, identifying potential bottlenecks and other issues that may be affecting the efficiency of your production plan. In addition, Craft Portal provides valuable tools for inventory management and forecasting, allowing you to make more accurate predictions about future demand for your products.
If you are interested in learning more about how Craft Portal can help you track the network days of inventory and improve the performance of your production plan, we invite you to reach out to us today to schedule a tour. Our team of experts will be happy to show you how the Craft Portal works and answer any questions you may have. Don’t wait, contact us today to get started on your journey to improved efficiency and profitability.