Planning the purchase, storage, and sale of stock—whether it be raw materials, components, or finished goods—to guarantee the proper kind and quantity of stock is accessible without keeping too much stock and tying up cash is known as inventory management. Inventory management can help businesses save money when done properly.
What Is Inventory Management’s Primary Goal? Making sure there are enough products or materials on hand to satisfy demand without overproducing inventory is the main goal of inventory management.
What Benefits Does Inventory Management Offer?
Running a successful business depends on precise inventory management. Regular stock tracking can assist in preventing stock mistakes and other issues. The advantages of effective inventory management include the following:
- Better Inventory Accuracy: With effective Fishbowl Inventory control, you are aware of what is in stock and only order the quantity of inventory required to satisfy demand.
- Reduced Risk of Overselling: Keeping track of what is in stock and what is backordered helps you avoid overselling products.
- Savings: Until it is sold, stock costs money. Carrying expenses include of labor wages, storage, handling, and transportation costs. Inventory can also be lost due to theft, calamities, or obsolescence.
- Avoiding Stockouts and Excess Stock: A company can reduce the number of days an item is out of stock, if any, and prevent carrying too much inventory by better planning and management. In our “Essential Guide to Inventory Control,” you may find more information on preventing stockouts.
- Greater Insights: Inventory tracking and stock control make it simple to identify sales patterns, keep track of recalled goods, and monitor expiration dates.
- Improved Relationships With Vendors and Suppliers: Inventory management also reveals which products sell well and in what quantities. Utilize that information as leverage to bargain with suppliers for better rates and conditions.
- More Productivity: Time that could be spent on other tasks is saved by effective inventory management solutions.
- Profits Rise: Increased inventory turnover results in higher profits since availability and demand are better understood.
- A more organized warehouse minimizes labor costs and expedites order fulfillment by organizing its inventory according to demand, which items are frequently sold together, and other variables.
- Better Customer Experience: Loyal customers are those who receive their orders promptly.
A company’s ability to succeed depends on its ability to manage its inventory effectively, and having knowledge of your supply at all times is essential. Decision-makers can efficiently manage their inventories and cut costs if they have the necessary tools.
A variety of native capabilities are available from Fishbowl Inventory for managing stock and cycle counts, identifying reorder points, and tracking inventory across different locations. The demand planning and distribution requirements planning tools can help you achieve the ideal supply-demand balance across your whole enterprise.