Inventory management is the act of finding, storing, using, and improving the company’s assets – that is, products, equipment, etc. – in a practical way. Inventory plays a major role in a company’s supply chain, as it directly affects how products are sold and distributed.
For example, if you can stock a certain number of products in a warehouse every month, you need to stay on top of import and export regulations. Otherwise, your customers may find themselves receiving orders late, or not receiving them at all.
In short, inventory management helps you plan production, cash flow, and purchasing in a demand-driven market to maximize your resources.
Typically, inventory management includes:
- Inspection of shipments and suppliers
- Product level monitoring
- Warehouse Security Improvements
- Adding QR codes to merchandise (you can use one of the best QR code generators)
- Receipt and registration of new products
- And many others
Inventory management can be divided into 5 main types. The difference between them is in the level of production they focus on.
Let’s break them down:
- Materials: materials used to produce goods or intermediates and raw materials (for example, paper mills use cellulose fibers from plants).
- Work in progress: products or products that are not yet ready for sale (for example, products that need decoration or final finishing)
- Packaging: Materials used for packaging (such as boxes).
- MRO (Maintenance, Repair, and Service) provides items that support the production process but are not necessarily part of it (such as gloves and safety covers).
- Finished goods: goods ready for sale.
Remember that your business may not use all types of merchandise. For example, an e-commerce business that does not manufacture its own goods may not need to include MRO items in the inventory.
Now that you understand the basics of inventory management, let’s answer an important question.
Why is inventory management important for any business?
Let’s say you are the owner of a company that manufactures various auto parts and a customer orders 10,000 airbags. You accept the order and give your customer an estimated delivery time of 1 month.
However, when you start producing these airbags, you will find that what you have in stock is not enough to produce the whole batch. So you call your supplier to order more. But there is a small problem; it will take them 3 weeks to deliver your order, which will make it not delay in production. This is a bad thing for you and your customer because you have to increase the time in their production (and there is a loss of money).
You could have prevented it with a little planning and planning.
We can help you set up this integration and so much more. And by partnering with Platinum Partner Syscor, you can rest assured knowing that your setup will be seamless.