Management For Engineers

Inventory Management

By Eric Morris

Inventory management refers to the process of managing the stocks of finished products, semi-finished products and raw materials by a firm. Inventory management, if done properly, can bring down costs and increase the revenue of a firm.

How much one should invest in inventory management? The answer to this question depends on the volume and value of inventory as a percentage of the total assets of a firm. The importance of inventory management varies according to industries. For example, an automobile dealer has very high inventories, sometimes as high as 50 per cent of the total assets, whereas in the hotel industry it may be as low as 2 to 5 per cent.

The process of inventory management is a continuous one and there are various kinds of solutions available. It is advisable to employ specialized staff for inventory management.

The inventory management process begins as soon as one has started production and ordered raw materials, semi-finished products or any other thing from a supplier. If you are a retailer, then this process begins as soon you have placed your first order with the wholesaler.

Once orders have been placed, there is generally a short period of time available to a firm to put an inventory management plan in place before the supplies are delivered. Inventory management helps a firm to decide in advance where these supplies should be stored. If a firm is getting supplies of small-sized goods, it may not be much of a problem to store them, but in the case of large goods, one has to be careful so that the warehousing space is optimally utilized.

From invoices to purchase orders, there is lot of paperwork and documentation involved in inventory management. Several software programs are available in market, which help in inventory management.

Inventory Management provides detailed information on Inventory Management, Inventory Management Software, Supply Chain Inventory Management, Inventory Management Systems and more. Inventory Management is affiliated with E-Procurement Services.

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By Fred Z. Popasonario

There are many different reasons why inventory management is so important in today's world. One of them is being able to know exactly how many of each product you have in stock, so you know exactly how much needs to be ordered. Without proper inventory management, you may order too many of one thing, and not enough of something else. What does this translate too? Running out and having to order more, and having an over stock of other products, costing you not only money, but available storage space.

Proper inventory management also allows you to track the products you sell. You can see at a glance what items sell the most, what time of the year that more are sold, and have a chance to see what patterns develop so you can plan your buying accordingly. For an example, if you are a clothing merchandise store, and you find that you sell more coats and hats during the fall, just before Winter, or during the Spring, then you can order more of these items before then, so there is enough merchandise before hand. It also helps you track products that don't sell as often, or at all, so you can either not order as much as your would routinely do, or maybe even decide to discontinue this product line altogether.

Having the right inventory management software is just as important. Today, inventory has become streamlined, with bar codes, scanning devices, and computers, so you need software that keeps up with the latest technology. You need to be able to find out at a glance if you are running out of something, rather than going in the back or having to call the warehouse to find out. Your inventory managers need to be able to quickly and easily count how many items there are, and be able to scan the bar code and have it downloaded into the computer automatically, without having to physically write down the information and then input it into their inventory computer.

Inventory management is vital to today's businesses, especially in the retail market. In order to keep up with sales, trends, and popularity of a certain product, or line of products, the only way to do this is if you can track what sells, how much does at certain times of the year, and what products are loosing ground. This really is the only way to keep up with your competition, order the right amount at the right time, and know whether to eliminate products that just aren't selling, saving you space, time, and money.

There are an abundance of different kinds of inventory management software available on the market. These are compatible with just about any type of computer operating system you have. Not all software is the same, so you really have to take the time and make sure that it is right for your needs, and for those people who are starting off small, will be able to expand and grow as you do, without having to buy new software all the time.

Visit Inventory Management Systems to learn more.