Allocate

CIOP is an end-to-end supply chain certification program that focuses on practical aspects in addition to the theoretical concepts. For example, a typical supply chain certification may teach what is cycle counting and how to do the ABC classification. CIOP starts with these fundamental concepts and goes on to teach the participants to develop the cycle counting policy of an organisation, 10+ criteria used in ABC classification, multi-criteria ABC classification and cycle counting best practices to increase the efficiency and effectiveness. In case of CIOP, you learn the concepts and will be ready to implement in your day-to-day job in supply chain. The pedagogy is structured such a way that all the concepts are explained with industry examples, which makes CIOP as the preferred training and certification program for supply chain within the industry.

The phrase 'allocate' can mean to assign a specific item to someone or to multiple individuals. It's a method for distributing resources so that each get more than they want, while the others don't get as much as they need. An allocation of resources in any production, distribution, repair, packing or assembly process occurs when the distributors get their required items and the manufacturers get their units that fulfill their requirement. 

When two manufacturers need parts, one manufacturer can order the desired amount and the other manufacturer can send his order for its equivalent number of parts. Similarly, when the inventory reaches its maximum level and distributors and stockers have fulfilled their orders, the warehouses will hold excess inventory.

Allocating is done for several purposes in supply chain management, including avoiding stock out situations, accurate inventories and adequate amounts of product at hand levels. In inventory operations, when distributors and stockers meet the established purchasing order allocations, the distributors or stockers inform the managers. The managers then decide the allocation of inventory by considering the quantity of product sold, available space for storage, profit margins, the costs of operation and the availability of raw materials. Sometimes, it's not enough to just observe how distributors and stickers make decisions. If you want to make the most of your company's profit margin, you must also proactively make sure that you're maximizing the profit of your company. To do this, there are 3 important warehouse system functions that you should allocate some thought to:

As you can see, allocating is very important to the success of any operation. If you're good at all of these functions, then you should be good at managing your material inventory. However, sometimes there are certain warehouses or distribution facilities that require special supervision and training. If you're not very familiar with any one of these functions, then you should consider hiring a warehouse manager or an all loader operator who has a background in these functions.

Related Articles

Supply Chain Allocation Strategies
Product Allocation Planning - Managing supply constraints
What is Inventory allocation?
Soft-and-hard-allocation
The Art of Allocation- Right stock, place and time