Share through Email Do you consider distribution and inventory costs when you design products?
Update me with the latest news from Barcodes Inc. What is Inventory Management? Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished product results.
Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory. This process usually involves controlling the transfer in of units in order to prevent the inventory from becoming too high, or dwindling to levels that could put the operation of the company into jeopardy.
Competent inventory management also seeks to control the costs associated with the inventory, both from the perspective of the total value of the goods included and the tax burden generated by the cumulative value of the inventory.
Balancing the various tasks of inventory management means paying attention to three key aspects of any inventory. The first aspect has to do with time. In terms of materials acquired for inclusion in the total inventory, this means understanding how long it takes for a supplier to process an order and execute a delivery.
Inventory management also demands that a solid understanding of how long it will take for those materials to transfer out of the inventory be established. Knowing these two important lead times makes it possible to know when to place an order and how many units must be ordered to keep production running smoothly.
Calculating what is known as buffer stock is also key to effective inventory management. Essentially, buffer stock is additional units above and beyond the minimum number required to maintain production levels. For example, the manager may determine that it would be a good idea to keep one or two extra units of a given machine part on hand, just in case an emergency situation arises or one of the units proves to be defective once installed.
Creating this cushion or buffer helps to minimize the chance for production to be interrupted due to a lack of essential parts in the operation supply inventory. Inventory management is not limited to documenting the delivery of raw materials and the movement of those materials into operational process.
The movement of those materials as they go through the various stages of the operation is also important. Typically known as a goods or work in progress inventory, tracking materials as they are used to create finished goods also helps to identify the need to adjust ordering amounts before the raw materials inventory gets dangerously low or is inflated to an unfavorable level.
Finally, inventory management has to do with keeping accurate records of finished goods that are ready for shipment. This often means posting the production of newly completed goods to the inventory totals as well as subtracting the most recent shipments of finished goods to buyers.
When the company has a return policy in place, there is usually a sub-category contained in the finished goods inventory to account for any returned goods that are reclassified as refurbished or second grade quality.
Accurately maintaining figures on the finished goods inventory makes it possible to quickly convey information to sales personnel as to what is available and ready for shipment at any given time.
In addition to maintaining control of the volume and movement of various inventories, inventory management also makes it possible to prepare accurate records that are used for accessing any taxes due on each inventory type.
Without precise data regarding unit volumes within each phase of the overall operation, the company cannot accurately calculate the tax amounts. This could lead to underpaying the taxes due and possibly incurring stiff penalties in the event of an independent audit. Barcode Scanner We can help you find the right scanner to meet the demands of your business.
From retail to warehousing, BarcodesInc has scanners to read every barcode type in any environment. Mobile Computer Our Mobile Computers and portable data terminals are the perfect multi-use tool for your advanced data capture and mobility needs.
With options for batch and real-time wireless Wi-Fi and Cellular data capture, we have units for every application and environment.
Find the right device for wherever your business takes you.Managing Supply Chain Inventory The definition of Management Supply Chain Inventory Inventory management is the supervision of non-capitalized assets (inventory) and stock items.
A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale. What is Inventory Management? Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished product results.
buffer helps to minimize the chance for production to be interrupted due to a lack of essential parts in the operation supply inventory.
Managing Supply Chain Invevtory Essay Managing Supply Chain Inventory The definition of Management Supply Chain Inventory Inventory management is the supervision of non-capitalized assets (inventory) and stock items.
Inventory management refers to the process of ordering, storing and using a company's inventory: raw materials, components and finished products. A company's inventory is one of its most valuable.
Stock control, otherwise known as inventory control, right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain.
This guide explains different stock control methods, shows you how to set one up and tells you where to find more information. Batch control - managing. The Role of Inventory in Supply Chain Management. Managing customer and vendor relationships is a critical aspect of managing supply chains.
In many cases, the collaborative relationship concept has been considered the essence of supply chain management.