Everything You Need to Know about Inventory Management

Summary: Have you been facing difficulty in managing stocks and fulfilling customer demands? Well, if yes, then you must get advanced inventory management software. Learn here everything about inventory management in detail. 

If you want to make sure that there are enough materials or goods that can meet customer demands without developing extra inventory or overstock, then inventory management would be the ever best platform for you. 

Let us learn everything about inventory management in this post.

So, let us dive in.

What is Inventory Management?

Inventory management aids businesses to analyze the stocks and their needs as per the time requirements. It helps track inventory right from buying goods to their sale. Inventory management helps identify the latest trends in the market while responding to them actively. This ensures that there is much stock in the warehouse that can fulfill customer demands along with warnings whenever there is a shortage of stocks. If inventory management is executed properly then it helps businesses save a lot of cash. 

Some Challenges of Inventory Management 

The major challenge of inventory management is having a lot of inventory and the incapacity of selling it. To add on, not having required inventory and possessing no knowledge of which items should be there in the inventory are also some of the prominent challenges to notice. 

Let’s see some other hurdles in short details-

Get precise stock details

Not having precise stock details will leave you nowhere! With accurate stock details, you can refill the stock and can track which stock is consistently moving. 

Outdated operations

Manual work or outdated processes makes business functioning error-prone and slows down the speed of operations. 

<< Also Read: 6 inventory management tips in the food production industry>>

Constant customer behavior change

Customer demands and choices keep changing with the passing of time. However, If your system is unable to track the recent trends, then it will become quite difficult to analyze when and why customer preferences have changed. 

Warehouse space utilization

It is one of the major challenges of inventory management. It will be tough for the staff to locate the items in the warehouse. If you have advanced inventory management then it can easily deal with this issue. 

What are the Inventory Management Process Techniques?

The prime aim of inventory management is to analyze stock levels as well as the location of stocks in warehouses. To track the product flows from the supplier through the production process to the consumer, you can deploy inventory management software. In the warehouse, inventory management helps track pick, pack, shipping. 

ABC Analysis

The technique revolves around analyzing the most popular and less popular stock types. 

Batch Tracking

It gathers all similar groups and tracks expiration dates while also tracing defective items. 

Consignments

In the consignment technique, you won’t pay the supplier until and unless a particular product/item is not sold. In this case, the supplier also keeps the inventory ownership till the company sells it. 

Volume Shipments

It includes loading unpacked materials into trucks/ships by the supplier. Volume shipments also include storing, buying, and shipping inventory in huge volumes. 

<< Also Read: The Impact of Poor Inventory Management in Discrete Manufacturing>>

Cross Docking

Here, you can unload items from the supplier truck to the delivery truck delivery. 

Dropshipping

With this strategy, the supplier ships products from its warehouse to the user directly. 

Demand Forecasting

It is the most important strategy which helps predict customer demand. 

Reorder Point Formula

With this strategy, businesses can find out the minimum amount of stock that should be there before reordering and then plan inventory as per the condition. 

JIT (Just-in-Time)

This technique helps maintain the lowest level of stocks before refilling them. 

FIFO/ LIFO

First in First Out technique means taking out the oldest stock first while LIFO means selling the latestly purchased inventory which is highly expensive. 

Advantages of Inventory Management Software with ERP 

Inventory management at the business place can help save a lot of money while keeping a precise track of the stock count. Now, let us see the advantages of integrating inventory management with an ERP system. 

View on varied inventory levels throughout the business

ERP systems offer an extensive view into orders from all departments and fulfill basic functioning operations. However, centralized purchasing lowers the deduplication when reloading stock while having the capacity to buy items in bulk. Extra advantages will be added whenever you are integrating ERP software with the business functions. 

Automation

RFID scanning and barcode scanning can increase the speed of stock-taking, stock fulfillment, and stock receiving. An ERP software for inventory management helps reduce errors right from the manual entries while keeping staff away from redundant tasks. 

Enhance forecasting

Deploying an ERP with inventory management easily handles data collection as well as for analytics that can offer significant views into trends. Once you get into trends you can easily improve stock prediction all at once. 

Optimization of inventory

Having a sturdy inventory management system can easily maintain a variety of stock, quantities, and the most economical price. It can help you ensure that you have everything as per the requirements.