Tuesday, 7 January 2014

What is Inventory Management?

If you have a business of any sort, chances are that you carry some amount of inventory. This is particularly true for retail establishments that actually sell physical products, but it can also be true if you make products or even just have office supplies in your building. Regardless of what exactly counts as “inventory” in your business, taking the appropriate steps towards inventory management will allow you to save money and make sure you’re not losing money without any knowledge as to why.

In a nutshell, inventory management is the proper oversight of units coming in and out of your existing supply in an efficient manner. In order for the process to work properly, you will need to control every aspect of the unit transfers to ensure that you aren’t stocking too many of a single item or allowing a certain item’s numbers to fall too low. Usually, you will find that using some type of inventory software will make this task a much simpler process.

If you are in a retail environment, inventory is vital for both cost controls and to make sure your customers can get the items they want. Fortunately, most POS systems use specific software that allows you to scan in new items and reduce inventory numbers each time you make a sale so that you can have an accurate picture of what’s on your shelves. You can usually look at other types of reports as well including sales trends that will allow you to properly gauge the amount of certain items that you will want to keep in your inventory.

Of you are operating a warehouse; on the other hand, your job is going to be a bit more difficult. Most warehouses exist to supply several locations with goods, so making sure that you’re on top of each of those individual location’s needs is crucial to having proper stock levels. Ideally, your warehouse will receive a constant stream of sales and inventory data from the satellite stores so you can have the “big picture” that will allow you to react and order enough pallets of goods to fulfill all of their orders. With those types of metrics coming in on a real-time basis, you can predict what a location will need before they do.
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