Understanding the Inventory Management
Inventory management is the mode of planning used for buying, storing and selling of stock. Stock can be in multiple forms; it can be in the shape of the raw materials, accessories or the finished goods. The management of inventory ensures that there is enough stock available. It helps you prevent excess stock that can cause a financial burden. Therefore, striving for an error free inventory can save you from financial losses and unwanted expenditures.
Objectives of Inventory Management
The basic goal of inventory control is to guarantee that you have adequate stock lying with your company. Thus, you can meet the needs and the demands without either overstocking or excess inventory.
How Can Inventory Management Help?
If you are in the business of making, buying or selling products, then it is very important to prepare accurate inventory. This will let you track the stock regularly making it possible to avoid all stock shortages. Here are a few advantages that you can realize with inventory management:
- It helps you in maintaining the desired stock levels without getting overloaded. At the same time, it will help in meeting the demand on time as it helps in avoiding shortages.
- It will prevent overselling by keeping an eye on what is in the stock and what is about to run out.
- As long as stock sits on your shelves, you are accumulating storage costs. These costs include handling, transportation, insurance and other expenses. The longer the stock remains the risks of accidental loss increase, too.
- Once you have the properly maintained inventory, it becomes possible to plan and manage the things correctly while the stock is still there.
- It helps you keep track of the stocks and control them too.
- It offers a means to build confidence between vendors and the suppliers. It is easier to track trends in the market, assisting in negotiating better prices and terms with suppliers.
- It saves you precious time that can be used more efficiently.
- Better stock management means more profits.
- Managing the inventory means that the entire system is running smoothly in an organized manner.
Why Use Inventory Management Software Integrated With ERP
There are several practices available to keep track of the stocks correctly. If you implement inventory software you can experience greater benefits like those given below:
- Offers end to end view for thorough functioning. Saves from duplication.
- Speedy stock management with barcode and RFID scanning that reduces errors reported during manual entries.
- Gives access to real-time information
- Gives insight into existing and the future trends.
- Decision making supported by data
- No shortage of stocks due to forecasting.
- Keeps control over the stock levels ensuring harmonization
- Easy to track 1,000 SKUs in 15 facilities manually.
What Is Not Good About The Inventory Management System?
- Most enterprise level software is too expensive for small businesses.
- Hard to learn
- Frequent system crash reported
- Risk of breach
Tips to Choose an Inventory Management System
- Find out about the industries it serves
- Three features are a must have including automated replenishment, cycle counting and traceability.
- Go through the different case studies related to the different businesses to get the real time experience.
Final Words
Inventory management is extremely important for running a business. In a product business case it is very important to maintain insight of stock so that it stays well maintained. It is therefore critical for the success of the related business. If you have got all the essential tools and they are chosen carefully then the decision making becomes equally helpful through the effective inventory management.
If yours is a small business, you’ll want a software that is affordable and easy to implement. Many of the big box ERP software companies charge many thousands of dollars for setup and then an exorbitant monthly fee.
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