Inventory is a broad term that encompasses all the commodities, goods, merchandise, and materials that are held by a company with the intention of selling them in the market to make a profit.
What is Inventory Management?
Inventory Management is the complete processing of inventory information, to help a company plan ahead; it covers the purchase of goods, their storage and eventually their sale. This comprises the management of raw materials, components, and final goods, alongside the warehousing and processing of such commodities.
Management of one’s inventory is critical for all types and sizes of enterprises. It is easy for seemingly simple decisions, such as when to resupply inventory, what quantities to purchase, what price to pay, and when to sell and at what price, to become overly complicated. To easily establish reorder amounts and points, small businesses often use formulas within Excel spreadsheets to manually track stock changes. Enterprise resource planning (ERP) software is typically utilized by corporations with a larger workforce.
Warehouse Inventory Management
Warehouse management is the practice of receiving, tracking, auditing, and managing stock in a warehouse or other storage facility so that orders can be filled. Management of a warehouse also includes restocking when certain lower limit quantities are reached, bringing your stock back to the best levels based on past sales. Warehouse management is a lot like other types of inventory management in that it focuses on keeping track of products coming in and going out while also knowing where each piece is.
Inventory Management Techniques
These techniques help keep track of orders, how they are used, and where they are stored. They also help manage finished goods that are ready to sell. Improper inventory management can lead to higher storage costs, a shortage of working capital, wasted labor resources, and a break in supply chain
1. ABC Analysis
It simply means Always Better Control Analysis. It is a method for keeping track of inventory in which items are put into three groups: A, B, and C.
- Products in the A category of inventory are closely watched because they are high-priced and may only be a few in number
- Products in B category are less expensive than those in the in the A category, and there are about the same number of items in the A category.
- In the C category, there are a lot of inventory items that need less investment, so the level of control is the lowest.
2. The Just-In-Time (JIT) method
With the Just in Time method of inventory control, a company only keeps as much stock as it needs while it is making something. With no extra stock, the company doesn’t have to pay for storage or insurance. When the company’s current stock is almost out, it places an order for more. This is a risky way to manage inventory, because if you wait too long to order new items, you might run out of stock. So, this method needs careful planning so that new orders can be placed at the right time.
3. Material Requirements Planning (MRP)
MRP is a way to keep track of stock in which the manufacturers order the stock after looking at what they think sales will be. The MRP system brings together information from different parts of the business where stock is kept. Based on the data and market demand, the manager would carefully place an order with the material suppliers for new stock.
4. Minimum Safety Stocks
This the level of inventory that a company keeps, to avoid running out of anything. It is the level at which we place a new order before we run out of what we already have. For example, if a company has a total of 18,000 units in stock, they will insert a new arrangement when the stock reaches 15,000. So, the minimum safety stock level includes the 3,000 units of inventory.
Inventory Management Software
These digital inventory management tools keep track of and manage items as they move through the supply chain at different stages. Examples of the best software include:
1. NetSuite ERP
A software that offers you complete oversight and control over your inventory, regardless of quantity or location. NetSuite ERP is the most popular software for inventory management, largely due to its smooth order fulfillment. With its built-in tools, you can track inventory in multiple locations and keep an eye on cycle points, reorder statistics, and safety stocks. The solution is for medium-sized and large businesses that are growing quickly. NetSuite ERP makes sure that you have enough inventory to fill orders at any time.
2. ShipBob
A popular choice for wholesalers, retailers, and e-commerce businesses because it is an advanced, all-in-one inventory management, and e-commerce fulfillment platform. Claiming to improve shipping times, shipping costs, and customers’ overall shopping experiences, this software can easily handle large volumes of orders. Ship Bob uses a strong mix of connected technology, warehouses in good places, and reliable fulfillment services.
3. ShipHero
A complete cloud-based order fulfillment software with strong panels for supply chain management, inventory management, shipment and returns management. ShipHero was founded to meet the growing complexity of ecommerce businesses and boasts quicker delivery times than competitors.
Inventory Management Companies
1. Top Shelf
Scout’s TopShelf is a system for managing inventory based in the cloud.
Benefits
- TopShelf mobile devices print detailed barcodes.
- Manage inventory and the warehouse on the go.
- Widely compatible, including with- NetSuite, Magneto, Salesforce, and QuickBooks work well with it.
2. NetSuite
NetSuite can be used in almost every area of business. People know them as the number one Cloud ERP, which stands for “Enterprise Resource Planning.” The tools they use to manage their warehouse, production, and supply chain are all part of their ERP platform.
Benefits
- Accurate and regular checks of your inventory.
- Ease of categorizing stock and sales channels.
- Efficient traceability to keep track of a product’s lifecycle and serial number.
- Stress-free warehouse management with bin tracking and multiple locations.
3. Fishbowl
Automated inventory management and integration with leading business software tools.
Benefits
- Instant stock updates.
- Stock level checks across all locations.
- Easy sales trend and data analysis.
- Quick barcode creation.
- Automated stock orders.
- Easy tracking of pick-up, packing, and shipping.
4. Infoplus
Infoplus makes it simple to combine your 3PL or storage facility into a single, easy to use inventory management platform.
Benefits
- Expert workflow management support service
- Hardware tech provision.
- Ease of order creation.
- Seamless transfer of stock between warehouses.
5. Finale Inventory
A cloud-based, central hub for warehouse stock management. Optimized for collating inventory data from multiple high-volume warehouses.
Benefits
- Processes stock data across multi-inventory channels.
- Wireless barcode scanning and stock labelling.
- Real time stock and sales reports via analytics dashboards.
- Widely compatible across major online marketplaces.
Conclusion
Mismanagement of inventories, for example being ‘Out of Stock’ too frequently, can pose significant risk to sales and consequently the success of a company due to drops in revenue. So, the function of any company seeking to supply goods or services is dependent on efficient inventory management techniques and software that assist processes such as stock checking and ordering.
