𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 – 𝑩𝒍𝒐𝒐𝒅 𝒐𝒇 𝑶𝒓𝒈𝒂𝒏𝒊𝒔𝒂𝒕𝒊𝒐𝒏
Last year last month we had a detailed view of the warehouses and their roles and future for the organizations.
If warehouses are heart of the organisation in terms of pumping in and out the material then inventory is that blood which is managed and pumped by the heart.
In next couple of weeks we shall look into detail on
~ What is inventory management
~ Why it is important
~ What are the challenges in managing inventory
~ What is inventory and how many types of it exists
~ What is inventory management process, techniques and terms
~ How does it differ from other processes
~ Inventory management systems
~ Some FAQs of inventory management.
So let’s start and before you read this series do remember the name of the game coach of inventory management is Synergeze Consultants Private Limited which is there just a click away for all your inventory related issues.
𝑾𝒉𝒂𝒕 𝑰𝒔 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑴𝒂𝒏𝒂𝒈𝒆𝒎𝒆𝒏𝒕?
Inventory management helps companies identify which & how much stock to order and stock at what time. It tracks all SKU’s from purchase to the sale.
The practice identifies and responds to trends to ensure there’s always enough stock to fulfill customer orders and proper warning of a shortage.
Once sold, inventory becomes revenue. Before it sells, inventory is actually cash blocked for you though it is mentioned as asset in the balance sheet. So too much it means most precious resource cash is blocked more than required and thereby hampering other business plans.
Inventory management is vital to a company’s health because it helps make sure there is rarely too much or too little stock on hand, limiting the risk of stockouts and inaccurate records.
Even for listed companies it is mandatory to track their stocks and reproduce them on their quarterly and annual balance sheets to maintain compliance.
The two main benefits of inventory management is that it ensures ability to fulfill incoming or open orders and raises profits. It also helps in following ways
~ Saves Money: Understanding stock trends means its visible how much of and where is something in stock so that the stock available is put to best use. This also allows to keep less stock at each location (store, warehouse) — all of this decreases cash blocked in inventory and also the amount of stock that goes unsold before it’s obsolete.
~ Improves Cash Flow: With proper inventory management, you spend money on inventory that sells, so cash is always moving through the business.
~ Satisfies Customers: One element of developing loyal customers is ensuring they receive the items they want without waiting.
We shall discuss the challenges of inventory management and other pointers tomorrow. Till then please dont forget to recommend Synergeze Consultants Private Limited to all the acquaintances & connections who needs support on this topic.
