Inventory management is, most times, oversimplified in businesses. Is it just a matter of tracking inventory movement? How many came in, how many were shipped out?
Inventory management is much more than just that.
While the basis of inventory management is about tracking movement, it also affects a whole range of other functions that ultimately contribute to the profitability and sustainability of business.
Purchasing relies very much on inventory data to decide on what to buy as well as how much to buy. Inventory provides the necessary information when making purchasing decisions such as:
- What needs re-ordering
- What quantity to purchase
- What is selling and what is not? (this affects both points 1 and 2 above)
- What was the last purchase price?
- Who are the usual suppliers you purchase from?
- Is there an alternate product?
In terms of sales on the other hand, inventory management provides information such as:
- What is available?
- If you have multiple inventory locations, is it available elsewhere?
- If stock is not available, when will it be available? In other words, has it been ordered from the supplier and when will it be delivered?
When a product is sold, is the process of shipping it out efficient? To ship it out, you need to know:
- Where is the product located?
- Is there more than 1 order for that product? If there is more than one, can all orders be consolidated so that picking needs to be done only once?
Inventory Control and Management is an important part of the Supply Chain. Ensuring proper management and control of inventory is critical to managing costs while ensuring you meet customer demand and expectations.
Read how your business your business can benefit from putting in place the right inventory solution.