Inventory Management
Why Inventory Management Plays a Crucial Role in the Logistics Industry?

Why Inventory Management Plays a Crucial Role in the Logistics Industry?

Why Inventory Management Plays a Crucial Role in the Logistics Industry?

Inventory logistics management is an important part of supply chain management that plans and controls the storage of goods, items, and crucial information about the flow and storage of goods. Logistics management is crucial to create a balance between the point of origin and the point of consumption of the final product to meet the consumer's requirements, efficiently and effectively.

Inventory management in logistics is a complex process, especially for bigger organizations, where the raw material is received and final goods after production are delivered in the storage area of the warehouse that is placed on shelves or compartments as stock or the raw material which is acquired in access for production is also considered stock; this is how logistics management is approached difficult because of its accurate implementation.

Inventory management uses various data and information to keep track of the goods as they move through the production process, including unique IDs, their lot numbers, serial numbers, cost of each item, the number of goods, and accurate time and date when they moved through which stage of the process.

Inventory logistics management is a supporting function to organizations of the logistics industry to execute their activities with the environment. The functionality of logistics management is more agile to adapt and maintain the stability of the inventory in an organization.

As many of the companies in the logistics industry often struggle with a common challenge that is to start working on a new strategy, its implementation, the right decision making, etc.

Through the approach of several disciplinary activities over various functional areas such as manufacturing, sourcing, etc. Logistics companies try and continue to implement innovative strategies and invest in those processes that are more likely to provide improvement in the processes.

Also Read: A Variety of Inventory Management Methods to Enhance Business

Moreover, invest in technology to keep increasing the speed of production and information as expected, in this fast-paced global economy. There is a high demand for streamlined automated processes that manage the proper flow of information that can make the data reflection fast and easy.

Logistics inventory management is one of the majorly required solutions so that it can provide more efficient streaming of insights in the supply chain and could easily integrate with the already existing systems in the organization.

Strategic Planning of Inventory Management in the Logistics Industry

A proper strategic plan can well optimize the entire outlook of the procedures and workflows which are included with the inventory and stock management. The digital or centralized solution gives you the best result by giving you access to every data and report in real-time from anywhere in the world with the data connection.

Involved as part of the supply chain, logistics inventory management includes various aspects as control and supervision of purchases from the customers, maintenance of stock storage, command on the product sale, and order fulfillment.

There are three core steps of inventory management in logistics:

  • Purchasing inventory - Consumable raw materials have to be purchased from a source vendor and delivered to the warehouse for operational acquisition.
  • Stock storage of inventory - Inventory is kept in stock till the time it is needed for the production. The raw material is transferred to the production site and when finished goods are produced, they are returned to the warehouse till they are shipped (out for delivery).
  • Profits from inventory - The amount of finished goods that are ready for sale is controlled and crosschecked for order fulfillment before they are shipped to the customers.

Principle of Inventory Management

The principle of inventory management is to hold costs.

Also, it tells to control the investment amount to maintain a balance between purchase cost and carrying cost by procuring the products in optimum quantity which is known as economic order quantity.

Also Read: How Do Logistics Companies Manage and Track Their Assets?

There are 4 categories of inventory management

  • Raw Materials - The purchase of raw material is done by the vendor to fulfill the purpose of production to transform it into a consumer good.
  • Work in progress inventory - The process of utilization and transformation of raw material while turning into a finished product.
  • Finished goods - The complete goods are consumer complete which are ready to be dispatched for consumption, after quality check i.e., available for sale.
  • Maintenance, repair, operation (MRO) goods - Items that are used as a support for the production process to develop a finished good, for future resale.

Advantages of Logistics Inventory Management

Logistics Inventory Management Advantages

There is always an involvement of the strategic planning to optimize all the ongoing processes in a company such as monitoring and managing inventory in real-time for their condition and availability status. Some advantages of inventory management include:

1. Improved Inventory Planning and Ordering

It becomes troublesome to measure the exact status of the products for their requirement if there is no clear approach to manage and monitor inventory. With better logistics inventory management, it is easy and convenient to know what items are already in stock and what is to order.

Through the automated approach of inventory management, there are fewer chances of overstocking any item i.e. no extra expenditure. Logistics inventory management done in detail allows the warehouse authorities to control inventory in terms of both space and cost-effectiveness.

2. Organized Warehouse

The strategies for inventory control lead to a well-organized center. An organized warehouse gives better results for all upcoming strategies. The process involves all the cost-savings as well as the fulfillment of improved final products for businesses to utilize the warehouse to manage the inventory properly.

It has been found in a survey that around 85 percent of logistics providers use warehouse management systems in the United States of America. It is also used in effective inventory management and optimization.

3. Improved Productivity and Efficiency

With the implementation of a good inventory management system, less time, effort, and resources are utilized in inventory management investment at other sites too. This implants a great increase in productivity as well as the efficiency of the produced goods and for the company.

Many technologies are used nowadays to fulfill the tracking of inventory at different sites for their movement, operations, utilization, etc., and still, keep an accurate record for each item.

4. Increased Consumer Satisfaction

All the above-mentioned advantages of logistics inventory management are indirectly linked with your customers only, they are the ones who trust you and can make you grow or lose in the market.

If you deliver a good quality product to your customer and satisfy them then it is your positive path of growth and if not, it's a bitter truth but no one survives with bad delivered quality.

To enhance productivity, you need a proper management solution for logistics management to deliver a high-quality product and increase customer satisfaction.

What Are the Benefits of Asset Infinity's Inventory Management Software for the Logistics Industry?

You can get better control over inventory with Asset Infinity's inventory management software.

1. It also allows you to set a re-order level for each inventory which means you do not have to worry about finish stock. Whenever inventory goes below the defined level your team will be notified about the low stock.

2. With this system, you can request to purchase a new item and look at the complete list of inventories.

3. Furthermore, you can see all the data of sales and purchases in real-time.

4. You can also set images or videos related to the item.

Also Read: What Are the Benefits of Inventory Management for Colleges and Schools?


The use of logistics management with asset management software gets more operational and productive in all the perspectives whether it is operational or stock keeping.

To utilize inventory management in logistics there are some objectives to follow for effective use. The inventory management solution aims to keep the stock update all the time so that it doesn't get either over-stocked or under-stocked. The objectives of inventory control are:

  • To supply the required materials continuously
  • Minimize the risk of under and overstocking of material
  • To reduce losses damages and misappropriation of materials

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