With changing consumer demands and rising pressures to cut costs and speed up the whole supply chain, maintaining inventory levels is a difficult, ever-changing task. You must be able to handle inventory levels while yet being adaptable and predicting correctly.
What is inventory management?
The goal of inventory control is to reduce waste and enhance convenience by ensuring that a company has the ideal quantity of goods on hand to fulfill consumer demands on time. The objective of inventory control is for companies to maintain just the required quantities on hand without spending too much money up front or sacrificing consumer pleasure.
Inventory control vs. inventory management
Inventory control is a form of inventory management, although it’s quite different from other varieties.
Inventory management is more concerned with the operational level and involved in warehouse system administration, from scanning new things in real time on the warehouse floor to preparing units for kitting and assembly.
Inventory management entails high-level control of inventory, from raw materials to stocked items. It covers ordering and restocking activity, as well as choosing locations and facilities for stock storage in a thoughtful manner.
Inventory management software generates inventory reports, automates monitoring, and aids in the identification of areas for improvement. An inventory solution management system helps you manage your inventory across locations and warehouses.
4 reasons why inventory control is important
You can cut costs, free up cash, improve logistics, and keep consumers happy when you have good inventory management. Here are some ways that ecommerce enterprises may benefit from inventory control.
1. Counts remain correct
Every company needs to have a proper system in place for inventory management. Inventory control allows you to keep track of all items in stock. To provide an accurate representation of all items on hand, use a digital inventory system that scans barcodes of new product and each unit picked in an order using electronics. This way, real-time inventory stock levels may be shown at any time.
2. Assist you in making the proper inventory management judgments
Inventory control is more than simply keeping track of inventory. It also takes inventory turnover into account, or how quickly inventories are sold and replenished over a certain period of time. The quantities and rates at which you replenish will never be 100% straight, so you must measure changes over time to adjust your replenishment rate and quantity.
Inventory control connects the upstream operations of purchasing and production to the downstream activities of sales and consumer demand in order to avoid bottlenecks, expedite procedures, identify sluggish-moving or out-of-date items, and even assist in evaluating suppliers.
3. Write-offs are eliminated
Inventory management directly influences inventory accounting, which measures the changes in value of physical inventory and costs of goods sold over time. Inventory control ensures that obsolete inventory is not written off by reducing waste, making it simple to calculate inventory value, and assisting your bottom line by only keeping goods on hand that you require.
4. Provides you with the correct number of goods to fulfill customer orders
To maintain the desired variety and minimize waste, an inventory system with good stock control would ensure that you keep your warehouse(s) as empty as feasible while still meeting demand. This is referred to as safety stock because the last thing you want to do is deliver orders late or keep consumers waiting.
You’ll be able to predict demand and keep track of inventory, which will minimize storage and inventory-carrying costs while still not adding the awful “out-of-stock” notice to your product page.