What Is Inventory Management?
Inventory management is the process of ordering, storing, and using a company’s inventory. These include the management of materials, components, and finished products, as well as warehousing and processing items.
For companies with complex supply chains and manufacturing processes, balancing the risks of inventory and shortages is very difficult. To work out these balances, firms have developed two major methods for inventory management: just-in-time and materials requirement planning: just-in-time (JIT) and materials requirement planning (MRP).
How Inventory Management Works
A company’s inventory is one of its most valuable assets. In retail, manufacturing, food service, and other inventory-intensive sectors, a company’s inputs and finished products are the core of its business. A shortage of inventory when and where it’s needed can be extremely detrimental.
At the same time, inventory can be thought of as a liability (if not in an accounting sense). A large inventory carries the risk of spoilage, theft, damage, or shifts in demand. Inventory must be insured, and if it is not sold in time it may have to be disposed of at clearance prices—or simply destroyed.
For these reasons, inventory management is important for businesses of any size. Knowing when to restock certain items, what amounts to purchase or produce, what price to pay—as well as when to sell and at what price can easily become complex decisions. Small businesses will often keep track of stock manually and determine the reorder points and quantities using Excel formulas. Graytech Digital uses Dynamic QR Codes that enable our clients to edit price descriptions and much more so they can print one barcode and the database in our Inventory Control system updates everything as you want a price change or item description. It also lets you track your inventory in stock that’s been sold each day and reorders from the manufactures if needed.
If you are in need or want to inquire about an inventory software for your system please contact us from the contact page and we will contact you right away.