Inventory Management
Inventory management is a systematic approach of ordering right level of inventories at right time & at right cost in right place and storing adequate amount of inventories for the future needs of an organization.
In short, inventory management monitor, supervise, and regulate the flow of inventories from the producer to warehouse to selling such inventories.
An organization uses numerous techniques of inventory management that concerned with minimizing the operating cost of inventory while maximizing the ability to provide products to meet the demands of customers for increasing their satisfaction.
Needs/ Importance/ Essentiality of Inventory management
It allows making smart decisions regarding to meet customers demand for products.
It improves customer’s satisfaction by delivering products in time.
It minimizes risks of losses of inventory by estimating accurate number of required inventory.
It identifies the most cost-efficient methods for ordering new products or inventory.
It enables to have right product at right time to meet or fulfill the order of the customers.
It promotes or creates brand loyalty by establishing positive experience towards the products.
It properly allocates the available inventory for the selling and distribution purpose.
It increases employee’s efficiency by reducing unnecessary tasks to manage inventory.
It identifies the location where the stocks are located for the easy access of such stocks that the customers want.
It helps to increase sales volume of products by providing adequate and diversified stocks in hand.
It retains and attracts existing and potential customers respectively that facilitates competitive advantage.
It facilitates growth of an organization by increasing profit and decreasing operating cost incurred while managing stocks through high inventory turnover.
Inventory management is essential to entry kind of business organizations as it helps them to prevent the shortage and excess stocks, it manage multiple locations, and ensure proper record keeping of inventory to increase the efficiency of an organization to deliver products that a customer wants in time.