THE BASICS OF INVENTORY MANAGEMENT AND CONTROL
Inventory Management and control is the process of efficient supervision and control of supplies and available materials such as stocks, office supplies, different products or merchandise, raw materials etc. The proper handling of the available items is in balance of their needs, the input and output necessary are properly taken care of to make sure that they have a steady flow of supplies according to the demand of their customers or according to their sales projection. The inventory management team will be the one to conduct the task of recording in order to re-assure that they have a safe on hand materials, they are also the one to sake keep and record the numbers of items that should be within a specified period of time needed to be available. The basics of inventory management and control is crucial to the company, specifically there are ways and means to control the inventory in order to ensure that what they have will be used in maximum potentials and balance utilization of their available inventory.
The first major concern of inventory management is the balance of time. A certain organization will have a basic needs of time for example their business is a retail store or grocery, the first thing they need to do is order the merchandise from a reliable supplier and so upon taking the orders the first consideration would be how long the order will be delivered in order to use or sell their products in the store? If a supplier met their time as specified or as stipulated then they will be the regular supplier but if they delay their delivery the inventory management may think that they are not very reliable sources of goods that may even delay their potentials to revenue, a consideration of change of supplier maybe applied. Another thing is the merchandise delivered if their products are perishables like vegetable, fish meat etc., how long will the products should last? Or when will it expire so that customers may not buy product that is not in good order. The accuracy of order, the execution of delivery and the control of time is one of the basic in inventory management. Through this process the organization will have a projection of estimated order and sales within a specific period of time.
The second concern should be the transfer and distribution of inventory. For example in a dress shop factory outlet they have already bought their stocks of raw materials such as yarn and threads and various types of garments like linen and silk, how long should it be kept in their stock room? Or where should it be placed? The inventory management and control will take pride that the raw materials should be equally distributed from their various outlets and so they are going to divide the raw materials into three equal parts if they have three different outlets. But if their outlet will have different needs then they may need to divide the raw materials accordingly and much more they should order a certain amount of raw materials that should be enough in order to reduce the cost of transfer, gasoline, delivery and labor expense. This inventory management and control process will definitely reduce the risk in their production if they have maintained the distribution of materials needed for operation.
The third major importance of inventory management and control is the exact calculation and accounting of inventory that they need accurate records that will show that their company is growing. Additional stocks that shows in their records of merchandise is equal to their assets and cash on hand while limited stocks may show a decline of their company. If there are unexplained records or if there is a manipulation of records that can be found in a department or in company this can be a manifestation of corruption. This usually happens in a government agency that the record keeping and inventory is inaccurate, there are also deficiency or records that can be found that the records are not equal to the available materials on hand. The manipulation of records for personal gain of employee who are tempted is easy and the amount at stake is high.
In order to prevent this manipulation of data, companies uses sophisticated inventory management recording system including inventory software that can easily trace changes, compute tax, ratio, percentage including sales and forecast of inventory that can be installed in a PC is password protected and only the most trusted individual can control such data. A sudden change of data can be easily controlled and identified. There are also barcode printer, labels and scanner for proper distribution and release of materials on hand. This high tech gadget has been very useful to speed up and organize the process in the inventory management and control of most company it is highly recommended to be an effective tools in all of their transactions.
Credit:ivythesis.typepad.com
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