Inventory Management

Inventory management helps managers decide the quantity of raw material (stock and required) to be ordered for normal and increased demand. The proper practice ensures that the industry has suitable supplies for any demand fluctuation and eliminates any chance of a shortage. 

Inventory stored is converted into revenue once it reaches the customers. Excess amount of inventory stored reduces the cash flow and costs money to keep the stock. 

The benefit of Inventory management:

[1] Improve cash flow: If the amount of stock stored is equal to the customer's requirement, then the industry's cash flow will be faster. All the supplies will be converted into revenue, and there will be no or minimal waste. 

[2] Saves money: Understanding stock trends means you see how much of and where you have something in stock, so you're better able to use your supply.

[3] Satisfying the customer: Proper inventory management will help customers receive the product without waiting, increasing their loyalty to the industry. 

There are various Inventory management techniques; some of them are as follows:

ABC Analysis, Batch tracking, Cross-docking, Demand forecasting, Economic order quantity, FIFO and LIFO, just in time Inventory (JIT I), Lean manufacturing, Material requirement planning, six sigma, Lean six sigma.

The Inventory management techniques will be explained in the coming blogs, explaining the detailed method to certify oneself in a particular technique.