What is Inventory Management? | Why Inventory Management Is Important and helpful?

The inventory also known as stock means a place where storage is done for goods and materials which is owned by a business and has the main purpose to sell it to the customers.

Inventory management is a way to describe the status of received goods in the store containing information such as size, weight, position, sequence, etc.  Every industry needs this who are not able to handle their work manually due to massive goods. So it is a lot helpful in many ways and plays an important role in almost every possible ways.

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It has been used by all industry whether it is small scale or large scale industry.

 

Tasks of inventory management are –

  • Time management – Order Time, Total Destination time, Expected Delivery
  • Details about total cost – Transportation cost, product cost, or other expenses cost
  • Asset management
  • Inventory forecasting
  • Inventory valuation
  • Checking available storage space
  • Quality management
  • Replenishment
  • Returns
  • Replacement of defective goods
  • Demand forecasting
  • Noting Expiry dates
  • Removal of expired products
  • Received and expected delivery check
  • Delivery details
  • Customized reports

 

If you have a large industry you need an inventory system required for the development of your business.

 

Why Is Inventory Management Important and helpful?

Now, we are going to discuss how an inventory system is going to help you.

Inventory management includes a retailer checking to achieve and maintain a proper official report collection while ordering, shipping, handling and associated costs are kept in check. It also contains a variety of systems and processes which can easily and quickly identify stock needs, set targets, give restoration techniques, report actual and expected inventory data and manage tracking and management of ordered material.

  • Material tracking – This includes the monitoring of material taken inside and outside the storage room. Thus, it can also track any prohibited area or in case of emergency, you can easily know the exact location of the vehicle. The primary objective of the inventory management system is that it can determine and also control stock levels within a centralized system.

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  • Saves your Money – An inventory management system will save you a lot of money as it reduces the need for extra staff to do each work. You can do it all by just clicking a few buttons by your hand or you can hire a manager who will look after all the things. This is the reason why a good inventory management system is required for growing your business.
  • Saves Time – The time required to complete all the tasks from ordered materials to delivery and storage distribution details. You might not know about the importance of an inventory system, but when you start using it you will know how amazing it is and what huge role it plays in reducing your work stress. With the help of an inventory system, you can do things in a single device without the need of unnecessary paperwork. Thus, it does save a lot of time which you can apply to other works or give more time to your family. Plus, it will also reduce the task completion time.
  • Make Reports of everything – With the help of inventory management, you can have reports of every single step. For example, if you are a manager of a clothing company, you will need some new clothes for your store every month, so that store will be supplied with some no. of products. Now, with the help of inventory management you can get a detailed report of product demanded file, loaded materials, box information, ID labeled information, transportation details with time and date, shipment details, material received reports, stored location report, material purchase report, etc.
  • Easy finding solutions – Sometimes, you might face an issue such as missing products or any other problems. Then, with the help of a centralized inventory management system, you can easily get to know at what point the problem has arisen, so this will help you a lot in finding solutions quickly and solve the problems.
  • Avoid Dead Stock – Dead Stock is a group of products which are no longer be sold, due to any reason like expired products, that product has gone out of season, out of style, or might not be liked by the customers. Through inventory management, you can avoid the dead stock.
  • Bring success to your business – If you have a large industry, you probably might also be having a huge store with a lot of daily customers. So for bulk buying, you need a lot of movement and storage facility, thus you need inventory management.
  • Improved quality of work and also your product – If your 80 percent of workload is reduced then it not only saves your time but it also improves your work quality as you don’t need to worry about the things which a machine can handle. Therefore, if you have saved your quality time then now you can focus more on the improvement of the quality of your product. Thus, an inventory management acts like multiple functions in a single system.
  • Increases brand awareness – With the help of an inventory system, your success rate will increase and after which your brand awareness will keep on spreading more and more. Thus, also bring success to your business too.

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  • Avoid Spoilage – If you’re selling a product that has an expiry date, there’s a huge probability that it will go bad for your business name if you don’t sell it in time. It might also harm the buyer’s body. So, to avoid this you need an inventory management system.
  • Save your Storage Costs – If some products are not able to sell or not liked by the customers, then that product will stay within your store which might increase your storage costs. So an inventory system will avoid such things.