What is Inventory Management?
Inventory management is the act of monitoring the inventory and the stock a company has. It is a highly important component of the Supply Chain Cycle and a method to supervise the flow of goods from the manufacturers to the warehouses and finally to the retailers.
Benefits of Inventory Management
Inventory management encompasses different types of inventories; the most significant of them are as below:
- Raw Materials.
- Finished Goods.
- Transit Inventory.
- Buffer Inventory.
- Cycle Inventory.
Each of these types of inventories has its own importance and plays a vital role in the smooth flow of goods from the start point to the end. All these types of inventories form the backbone of inventory management overall. The entire process of inventory management involves certain critical parameters to be used such as lot numbers, serial numbers, cost of goods, quantity of goods and the dates. These data points play a very significant role in the overall functioning of the inventories.
Now coming to the benefits of having sound inventory management, there exist numerous benefits of having a sound inventory management system. The major benefits could be listed as below:
- An inventory management system maximizes the sales and profits of any organization by minimizing inventory costs.
- The overall efficiency and productivity of the company are increased to a great extent by using such a system.
- The inventory management system integrates all the operations related to inventory and makes the job easier.
- The client retention and servicing is also facilitated by this system.
- Inventory management system plays a crucial role in making the whole system automated and reduces manual labor.
- The delivery performance is also enhanced to a great extent by implementing an efficient inventory management system.
So the above mentioned are the merits of having a good inventory management system. They simply highlight the importance of inventory management, which is really very necessary for an efficient conduction of a warehouse of a certain business domain.
Statistical Data on Inventory Management
There exist many statistical proofs citing the profitability and the usefulness of inventory management systems. One such piece of statistics is given by Explore WMS which throws light on the fact that 63% of the time the inventories are visited by the people who manage them. The operations of any company cannot be completed effectively without a sound inventory management system. Besides the above piece of statistics, 1/3 rd of the deadlines of businesses are dependent on a sound inventory management system. In case of its absence, they will miss these deadlines and incur losses.
To sum it up, about inventory management, it could be asserted that Inventory Management forms the backbone of any business and without that the smooth conduction of any flow of goods is not feasible at all. The best thing is to visit one Inventory of any company yourself and see it’s functioning practically.