Why does Inventory Management important?
Inventory management systemis a software system for tracking inventory levels, orders, sales and deliveries. It also used in the manufacturing industry to create a work order, bill of materials and other production-related documents. Companies use inventory management module to avoid product overstock and outages. It is a tool for organizing inventory data.
Inventory management can be a very complex process. Using a module to manage inventory will have the same positive impact as using a module to manage A/R. Through inventory management module, you can identify items that are not selling, avoid overstocking, and know when to order items.
What is the process of inventory management?
The process refers to supervising and controlling your stock items to ensure you always have the materials and products you need available. At the same time, you want to keep costs as low as possible. Each step of your inventory management flowchart results to a comprehensive functional unit.
While the overall process varies for each company, the image above shows the standard workflow. With that, we can draw out these three key aspects of any inventory management process:
1-Time: There are two top lead times to know: first, the time it takes the supplier to process the order and execute the delivery. Second, the time it takes to establish the inventory when transferring the materials. You have the information to run your operations if you know when you have to place an order and how many units, including stock, you have to order.
2-Movement of materials: It is important to track the movement of materials as they go through various stages. This will help you determine if there is a need to adjust the amounts of materials you are ordering before it dips to min level.
3-Accurate records: Maintaining accuracy of goods is the key for your inventory management. This means you should have an up-to-date, automated solution for updating the total of completed goods as well as subtracting recently shipped goods. Having the accurate figures lets you quickly convey the right information across your organization.
What is necessary goal of inventory management?
The main goal of inventory management is to increase the visibility and organization of inventory activity via automated and streamlined pick/pack/ship features.in addition; Companies often use inventory management Module to reduce their carrying costs. For example, Profusion INV® (Inventory & Warehouse) is used to track products and parts as they are transported from a vendor to a warehouse, between warehouses, and finally to a retail location or directly to a customer.
What is Profusion INV® (Inventory & Warehouse)?
With this module, you can monitor assets, track inventory data, manage items observe their life cycles and control your distribution to improve customer service and supply chain intuitively.
General Features of Profusion® Inventory & Warehouse
- Comprehensive master files and categorizations with user-friendly characteristics.
- Comprehensive item definition card, with ability to track pictures, models , Item vendors.
- Fast-moving/slow-moving follow-up on item movement.
- Tracking inventory transactions (open balance, entry voucher, out a voucher,
- Transfer requisition & transfer issue & transfer receive, damage, assembly De-assembly and stocktaking).
- System use of a perpetual stocktaking method. Handling of MWAC cost on a company or site level.
- Ability to generate balance reports, movement reports and item reports.
- Fully integrated with Profusion® 's General Ledger, Accounts Receivable and Accounts Payable modules.
What is top Benefits of Inventory Management ?
Here are the top benefits of good inventory management:
1# Inventory Balance.
Good inventory management helps you figure out exactly how much inventory you need. This makes it easier to prevent product shortages and keep just enough inventory on hand without having too much.
2# Inventory Turnover.
You need to keep a high inventory turnover ratio to ensure your products are not spoiling, becoming obsolete or sucking up your working capital. Calculate how many times your inventory sells in a year and see where you can make better use of your resources.
3# Repeat Customers.
Good inventory management leads to what every business owner wants – repeat customers. You want your hard-earned customers to keep coming back to your business to meet their needs. One way to do this is to make sure you have what they are looking for every time they come.
4# Accurate Planning.
Using smart inventory management, you can stay ahead of the demand curve, keep the right amount of products on hand and plan for seasonal changes. This goes back to keeping your customers happy all year long.
5# Warehouse Organization.
If you know which products are your top sellers and what combinations of products your customers often order together, you can optimize your warehouse setup by putting those products close together and in easily accessible places. This speeds up the picking, packing and shipping processes.
6# Employee Efficiency.
You can empower your employees to help you manage inventory. Training employees to use barcode scanners, inventory management software and other tools help them make better use of their time, and it helps your business make better use of its resources, both human and technological.
Conclusion:
Inventory is the biggest asset in your company, so in order to save money and make money, you need to protect that asset and nurture in the right direction. Without implementing inventory management techniques, you will never get ahead.
Sign up with an inventory management that masters the basics of inventory management. The fundamentals are key to a sustainable business. ProTech provides a better way to prepares businesses ahead with leading- edge solutions, commercial off-the-shelf integration, and customization, or technology consultancy that enhance the client’s bottom line through accurate accomplishment and alignment of business goals and technology needs.
Visit us: www.protech-soft.com
References:
https://en.wikipedia.org/wiki/Inventory_management_software
https://en.wikipedia.org/wiki/Average_cost_method
https://books.google.jo/books?id=UrF1DwAAQBAJ&pg=PA12&lpg=PA12&dq=1%23