Inventory management as a System and Technique

System:

A set of detailed methods, procedures and routines created to carry out a specific activity, perform a duty, or solve a problem.

With the structure being set and the process laid out, Inventory management helps in solving organizational problems and bringing more efficiency in the daily operations. Whether it's optimizing or improving the tracking, inventory management has an important role to play. Let's take a look at what are the problems inventory management helps to solve in growing organizations :

  1. Streamlining and Optimizing

    Streamlining and Optimizing

    This is the most effective solution inventory management offers. Be it collaborating orders from different solution, identifying items, simplifying warehousing operations, and order fulfillment process; inventory management has an important role to play. It helps to connect the dots, makes it easy to coordinate operations and process the data which can be further processed for decision-making. If you run a small or medium sized business, limited resources pose a grave challenge for your business. While you handle the day-to-day operations, you need to make sure that your are making an optimum use of all the resources and not letting go of any opportunity untapped. Inventory management does help in such situations.

    To give you an example, re-order point is an effective formula to avoid missing sales deals. By calculating the re-order level for different items, you are well prepared when the stock count reaches a particular level. This simple inventory management tactic, also helps in keeping the warehouse activities in check. By following a simple rule for re-ordering items from your vendor, your warehouse staff is always aware when is the next consignment expected.

  2. Tracking

    Tracking

    With the efforts being put and money spent in a business, it is imperative for any business person to keep an eye on the movement of the items. An item in your inventory has a quite a bit of journey from the moment it enters your store till it has been dispatched or handed over to the customer. But, when the volume of orders increase and also the range of products, it becomes quite a struggle to keep an eye on every movement. Identifying an SKU for items is the best possible way of solving this problem. You can go a step further and track each item with Serial number tracking or track the expiry of each batch with batch tracking feature. But, this can be done only after you have identified an SKU for the item.

    To learn more about Batch and Serial number tracking you can refer to these links -

  3. Accuracy

    Accuracy

    Maintaining accurate information is a need for every business, no matter if it's big or small. A lot of organizations usually face this problem wherein their data is not synchronized and when they decide to process it for further decision making, they couldn't make the head and tail of it. What many companies fail to fathom is that, the most important aspect of having accurate information is record keeping. The data needs to be stored at every process and it has to be consistent so that it is relevant to everyone. Inventory management helps in maintaining consistency and accuracy in the data which can be further processed for planning activities. The sales order number, the SKU of an item, the package slip number, etc. all of these data gets captured at every step if you practice inventory management. And, since the documentation takes place along with the process and in a step-by-step manner, it is more reliable in nature.

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