Cross-border e-commerce inventory management: classification and functional analysis

The management of cross-border e-commerce inventory has always been a key link in enterprise operations. Classified management not only helps optimize the inventory structure, but also effectively responds to changes in market demand. According to different standards, we can divide inventory into several categories, each category has its specific functions and roles.

1. Classification according to the function of inventory

(1) Turnover inventory

Turnover inventory is inventory retained to meet daily production and operating needs. Its size is usually closely related to the purchase volume. In order to reduce logistics and production costs, cross-border e-commerce companies usually choose bulk purchasing and transportation. The inventory formed in this way is called rotating inventory. This inventory gradually decreases with daily consumption and is replenished after falling below a certain level.

(2) Safety Stock

Safety stock is inventory set up to prevent the impact of uncertain factors in the supply chain (such as supply delays, demand fluctuations, etc.). Its size is usually related to the safety factor of the inventory or the inventory service level. By setting up safety stocks, cross-border e-commerce companies can effectively cope with the challenges of uncertain factors such as changes in transportation and tariff policies.

(3) Excess inventory

Excess inventory is inventory that neither supports the normal operations of the enterprise nor can it cope with uncertainties. Causes of excess inventory include order cancellations, design changes, forecast errors, etc. This part of inventory often leads to liquidity problems, especially for small and medium-sized cross-border e-commerce companies. The pressure is particularly obvious.

2. Classification by production process

Inventory can also be classified according to its different status in the production process:

(1) Raw material inventory

Raw material inventory refers to materials that an enterprise has purchased but has not yet been put into production. This part of the inventory includes various initial materials required for production and is the basis for the production of finished products.

(2) Work in progress inventory

Work-in-progress inventory is semi-finished products and processed parts that are on the production line. These inventories represent a link in the production process and are often an integral part of the product transformation process.

(3) Finished product inventory

Finished goods inventory refers to products that have been produced and ready for shipment. This part of inventory is usually the main source of products for sale by cross-border e-commerce companies.

3. Classification by inventory status

Another way to classify inventory is by its state:

(1) Inventory in stock

Inventory in stock refers to goods stored in warehouses (including domestic and international warehouses). This part of inventory is the main form of inventory and the most common type of inventory in business operations.

(2) Inventory in transit

In-transit inventory refers to goods in the process of transportation. Due to the long transportation path and time of cross-border e-commerce, this part of inventory may exceed the quantity of inventory in stock in some cases.

Conclusion

Cross-border e-commerce inventory management involves classification in multiple dimensions. These principles and standards can help companies better control inventory levels and achieve efficient operations. Through effective inventory management strategies, companies can not only improve capital liquidity, but also gain greater flexibility and response capabilities in the fierce market competition.