Why is inventory management so critical to organizations? Inventory management is attributed to the sourcing, storing, and selling of inventory. It includes recording raw materials as well as finished goods and the products being shipped. It may seem simple, but the larger your operation is, the more complex inventory management can become.
Your business’s specific inventory management needs will depend on the channels through which products are sold and through what types of raw materials are required to make. The goal of inventory management is to have the correct amount of stock in the right place, at the right time, for the best price. In fact, optimizing warehouses can save 20-50% on warehouse costs.
Using an inventory management system could improve your warehouse operations in a variety of ways. It can help you monitor production in real-time, analyze and adjust lead times, forecasting, and producing transaction history that can improve your bottom line and inventory accuracy.
However, inventory accuracy involves more than just simply knowing how many materials you have. It also affects your ability to fulfill orders. Without an accurate inventory, you may run into issues with too little or too much inventory.
This means it’s that much easier to potentially waste capital or miss sales. This can place issues to your bottom lines such as running out of stock, shrinkage, and the expenses associated with overstocking. Check out the accompanying resource below for more explanation and examples of why inventory management matters.
Infographic created by WSI, a warehousing and distribution company
Mashum Mollah is a tech entrepreneur by profession and passionate blogger by heart. He is on a mission to help small businesses grow online. He shares his journey, insights and experiences in this blog. If you are an entrepreneur, digital marketing professional, or simply an info-holic, then this blog is for you. Follow him on Instagram, Twitter & LinkedIn