We often come across the term inventory management in discussions about supply chains. However, have you ever wondered about its importance and the role it plays in a company’s success? To begin with, inventory refers to the stock of goods, including raw materials, work in progress materials, and finished goods that the product-based company sells to earn a profit.
Inventory Management is a comprehensive process in which the company oversees inventory management, starting from procuring raw materials to storing them in warehouses. It extends to the subsequent outflow of raw materials or stock, destined for manufacturing units or markets, respectively. The process of Inventory Management is integral to ensuring a seamless flow within the supply chain. Some key objectives of Inventory Management include:
- Preventing dead stock or perishability
- Optimizing storage cost
- Maintaining sufficient stocks
- Enhancing cash flow
- Reducing the inventories cost value
While an Inventory Management System organizes all integral elements of inventory management, it is the method for tracking goods from one end to the opposite along your supply chains. This system ensures you consistently know what you have, where it is located, and how to manage it effectively. It combines technology (both hardware and software) with processes and procedures overseeing the monitoring and maintenance of stocked products. These products may encompass company assets, raw materials, supplies, or finished products ready for dispatch to vendors or end consumers.
Organizations, from small businesses to large enterprises, can use inventory management to trace the flow of their products. Various inventory management techniques exist, and using the right one is crucial for delivering the correct goods at the right amount, place, and time. Inventory management software operates on multiple layers, integrating with accounting and enterprise resource planning (ERP) systems. These systems meticulously track products in inventory, often across multiple warehouse locations. Additionally, inventory management software plays a role in calculating costs, ensuring an accurate assessment of the value of goods. While some inventory management software systems target giant enterprises, they can be heavily customized to meet a corporation’s specific requirements.
Now that we understand how essential an inventory management system is, let’s examine how poor functioning can affect a company’s efficiency. Inefficient inventory management can incur significant time and financial costs, profoundly impacting organizational performance. This situation can result in lackluster profit margins and increased overhead expenses for the company.
To prevent your company from being affected by a poor Inventory Management System, we at Redian have solutions for you.
- We offer cloud based and on-premise Inventory Management System.
- Our Inventory Management Systems are configurable as per the customer’s demands.
- We have domain expertise in Inventory Management Solutions.
- Our Inventory Management Solutions are futuristic and long-driven solutions which will enable our customers from over-spending on effective solutions.