Inventory is essential for day-to-day activities without inventory organization's daily operation will not be completed. Inventory can be end-product, raw material, MRO good, etc. Maintain accuracy is very important in effective inventory management. In this infographic, you will know everything about inventory management.
What Is Inventory Management?
- Inventory management enables an organization to track, monitor, and control inventory that is manufactured, purchased or sold.
- It ensures that the organization has the right amount of inventory in the right place at the right time.
- Inventory management saves organization saves from overstocking and understocking issues.
- Inventory management is one of the most important activities that must be done in order to save the organization from unnecessary expenses.
What Is an Inventory Management System?
- The inventory management system automates the process and reduces human error.
- It keeps track of inventory and lets you know the location of inventory in real-time.
It provides accurate data that helps in making informative decisions.
- Inventory management system ensures that you have the right level of inventory in the right place.
Why Inventory Management System Is So Important?
The Inventory management system is important because it leads to:
- Minimum inventory loss
- Accurate inventory tracking
- Better customer satisfaction
- Precise reports
- Minimized theft and misplacement
- Enhanced productivity
- Better inventory utilization
How Huge Is the Market of the Inventory Management Systems?
According to Global Market Insights, “Inventory Management Software Market size crossed USD 3 billion in 2019 and is estimated to grow at a CAGR of over 5% from 2020 to 2026.”
What Are the Best Inventory Management Practices?
- Implement cloud-based inventory management
- Use batch tracking
- Ensure inventory optimized
- Use quality inventory
- Maintain inventory levels
- Utilize Inventory management techniques
- Forecast demand
What Are the Most Common Inventory Management Techniques?
1. ABC Analysis
Inventory is categorized into three categories A, B, and C. In category, A most expensive items are kept, in category B less expensive items than A, in category C least expensive items.
2. Prioritize Inventory
You can use a priority basis as per your requirement for instance as per the expiry date of inventory or you can use expensive inventory first.
3. Just In Time
Just in time is a risky technique. It keeps very low inventory in hand and orders when a customer needs it. This technique eliminates deadstock chances.
With this technique, you are free from managing inventory as some other firm takes care of it for you.
What Are the Benefits of the Inventory Management System?
1. Alert & Notification
Alert and notification feature avoids out-of-stock issues. This feature can be used in several other ways.
You can set a re-order level for inventory this way you do not have to order manually.
3. Real-time information
Real-time information lets you know precise inventory count. It updates purchase and sales numbers in real-time.
4. Tracking Inventory Level
You can know how much inventory is left in the stock so you can make an informed decision.
5. Reports & Analytics
Reports help in minimizing expenses and maximizing productivity. It also helps in tracking trends & forecasting demand.
Inventory management is critical for every business. If you manage inventory efficiently it will impact your bottom line in a good way but if you don't, it will impact negatively.
However, managing inventory is complex which is why organizations must utilize inventory management software. We have already mentioned a few of the major benefits of inventory management software.
If you have not invested in this software, then there is a lot of room for improvement in your organization!