What Is Inventory Management?
Inventory management is a system of tracking the flow of inventory. This process starts from the purchase of goods and continues through warehousing until the raw materials or stock are used in manufacturing or reach the market. This process can be managed manually or under automated system with the help of software etc.
Efficient inventory management ensures receiving, counting, sorting, handling, storage and maintenance of goods when they reach the business premises. Inventory management at the business level can be defined as having the right stock of material at the right time, at the right price, at the right place, and at the right level.
Business organizations have many Inventory Management techniques available to choose from. But the most common techniques include Economic Order Quantity (EOQ), ABC Analysis, Just in Time Management, EQR Model, VED Analysis, Last In Last Out (LIFO), and First In First Out (FIFO).
Types of Inventory Management
While setting up an Inventory Management System, the business organization needs to consider various aspects such as cost, budget, utility, accessibility. Inventory management can be classified into the following parts.
- Bar Code Inventory Management:- This type of inventory management is one of automated and simplified processing. Under this system the remaining stock can be traced with just one click in the computer device. The barcodes scanned in the process enable the software to keep track of inventory purchased, inventory used, etc.
- Perpetual Inventory Management:- This type of inventory management integrates bar codes and radio frequency identification with accounting inventory systems, inventory received systems and point of sales systems as well as production systems to track inventory movements. This is generally considered better for accounting purpose. This is called Perpetual Inventory Management.
- Periodic Inventory Management:- Periodic Inventory Management is a manual process. It is used to determine the closing value of inventory generally to be shown in the books of accounts at the end of the financial year. It is also analyzed quarterly based on the business requirement. This process is time consuming as it involves physically counting the inventory.
Top Business Inventory Management Jobs
- Inventory Manager/Director
- Inventory Analyst
- Warehouse Manager
- Supply Chain Manager
- Inventory Control Specialist
- Purchasing Manager
- Logistics Coordinator
- Inventory Planner
- Inventory Clerk
- ERP (Enterprise Resource Planning) Specialist
- Demand Planner
- Inventory Consultant
Inventory management is a critical aspect of business operations, and there are various job roles associated with it, each with its own set of responsibilities and requirements. Here are some of the top business inventory management jobs:
1. Inventory Manager/Director
Inventory managers or directors are responsible for overseeing the entire inventory management process. They develop and implement inventory strategies, optimize stock levels, and ensure accurate record-keeping. They may also manage a team of inventory analysts and coordinators.
2. Inventory Analyst
Inventory analysts focus on data analysis to optimize inventory levels, reduce carrying costs, and minimize stockouts. They use various tools and software to forecast demand, track inventory turnover, and identify trends that can help the company make informed decisions.
3. Warehouse Manager
Warehouse managers are in charge of the physical storage and movement of inventory. They oversee warehouse operations, manage a team of warehouse staff, and ensure that goods are received, stored, and shipped efficiently and accurately.
4. Supply Chain Manager
Supply chain managers have a broader role that includes inventory management. They coordinate the entire supply chain, from sourcing raw materials to delivering finished products. They work to optimize inventory at every stage of the supply chain to minimize costs and maximize efficiency.
5. Inventory Control Specialist
These specialists are responsible for monitoring and maintaining inventory accuracy. They conduct regular audits, implement inventory control procedures, and investigate discrepancies in inventory counts.
6. Purchasing Manager
Purchasing managers are responsible for procuring inventory and raw materials. They work closely with suppliers, negotiate contracts, and ensure that inventory is purchased at the best possible prices and delivered on time.
7. Logistics Coordinator
Logistics coordinators focus on the movement of inventory and goods. They plan and coordinate transportation, distribution, and delivery processes to ensure that products are in the right place at the right time.
8. Inventory Planner
Inventory planners use demand forecasting and sales data to plan inventory levels. They ensure that the right quantities of products are ordered and maintained to meet customer demand while avoiding overstocking or understocking issues.
9. Inventory Clerk
Inventory clerks are responsible for day-to-day inventory activities. They often work in warehouses and are responsible for receiving, counting, and recording incoming and outgoing inventory.
10. ERP (Enterprise Resource Planning) Specialist
Many companies use ERP software for inventory management. ERP specialists are responsible for configuring and maintaining the ERP system to ensure accurate and efficient inventory management.
11. Demand Planner
Demand planners forecast customer demand and work closely with sales and marketing teams to ensure that inventory levels align with expected demand. They play a crucial role in preventing stockouts and excess inventory.
12. Inventory Consultant
Inventory consultants are often external experts hired to assess a company’s inventory management practices and recommend improvements. They may work for consulting firms or independently.
These are just some of the key roles in business inventory management. The specific job titles and responsibilities can vary depending on the size and industry of the company. Effective inventory management is essential for controlling costs, improving customer service, and maintaining a competitive edge in the market.
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Challenges in Inventory Management
Inventory Manage has become extremely important and an essential part of business organizations. Many big and small organizations have adopted this system to keep track of their stock, but while implementing it practically, the companies also need to deal with many challenges.
- The personnel in the receiving and warehousing departments lack the required expertise and knowledge, due to which they do not segregate seasonal goods from other goods. Due to which things may move in the wrong direction.
- As we all know that need is the mother of invention, currently there is a wide range of thousands of millions of products according to the needs of the people. As a result, there has been a significant increase in the size of the inventory, which has become a herculean task to manage manually. Therefore this is also a big and important challenge in Inventory.
- The complexity of the supply chain is also a major challenge. Many times organizations or companies fail to track stocks or goods throughout the supply chain process. And it is also not necessary that business partners also adopt proper inventory management system.
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