Regardless of the industry you are in, every business should have a clear idea about inventory management as it is one of the main factors that contribute directly to your business success.
In today’s post, we’ll explore the true meaning of inventory management and its importance.
What is Inventory Management?
Inventory management in simple words is having the right inventory in the right quantity at the right time in the right place at the right cost. To put it in a different way, it is the supervision of your inventory or stocks.
It manages all the items in your inventory by weight, dimensions, amounts and location and more.
Inventory includes any asset that a company purchases or processes to manufacture the products or to deliver the services. But not money, tools or human resources the organization has. For an example, money and pliers don’t include in your inventory unless you are a bank or a money exchanging business or a business selling pliers.
Why do you need an inventory management?
It doesn’t matter, you are a small business with a small inventory with a small list of items or a large enterprise with a huge inventory, having a good inventory management can help your business in many ways.
Below are some of the benefits of inventory management.
- Improve accuracy
Monitoring every transaction happens in your inventory, from receiving, picking, packing, to delivery, inventory management will enhance the accuracy of your inventory data. The result is no more delays, overstocked or understocked items. - Reduce costs
When you have an effective inventory management in place, it will help you cut down costs in inventory related tasks such as in inventory handling, labour and more. - Save time
This also saves time as you have a better tracking system in place when it comes to managing all the moving parts of your inventory. For an example when you have up to date data of on hand and ordered items, time spent on recounts will be saved. - Sales patterns and future sales predictions
Analysing slow-moving and fast-moving items the right inventory management will let you know the sales behaviour of your customers which you can use to build your sales strategies and to predict future sales patterns. - Improved customer delivery
The right inventory management will make sure to have all the items in the right quantity enabling your customers to receive a smooth and fast delivery each and every time. Which will bring your business an increased customer satisfaction rate without having to do anything extra?
Automated Inventory Management System
When your business grows, new product lines get added to your portfolio and your inventory get bigger, tracking and managing everything manually can get exhausting. Records will reduce their accuracy, processes will become slow while labour force required will increase.
But managing a larger inventory doesn’t have to be complex and complicated anymore as now you can introduce automated Inventory management systems to your business.
Allowing you to manage your inventory with a click, an inventory management system can bring all the data right on to your monitor. The system also will track and trace every item automatically helping you improve the efficiency, productivity and speed of operations in your inventory.
Creating systems and processes to managing your inventory will directly impact on your profits.
We hope this post will inspire you to take immediate actions to improve your inventory management so you can take your business to the next level.
