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Inventory Management

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To keep the costs of storage within your company as low as possible, you want to keep as few goods in stock as possible. However, you must always have enough goods in stock. With inventory management you ensure a good balance.

Inventory management includes everything that has to do with managing goods flows within your company. You can keep track of your inventory in different ways. A good example is the barcodes applied by supermarkets: at the time of sale, they know exactly which product is sold.

At the end of the day an overview is generated of products sold and you can proactively order from the supplier " s ". Such a system is certainly not always necessary. Good inventory management has a number of fixed points:

1. Bring " and keep " structure in your inventory

To get a good start with inventory management it's important that you know what you have. To maintain a good overview of your inventory, there must be a logical structure that can be overseen by both you and your staff.

2. Set priorities

It's sensible to determine which products must be in stock at all times, and which products have a somewhat lesser priority. Based on your own assessment, you can determine for which products, for example, a safety stock must be held.

3. Choose a stock management method that suits you

A stock management method can help you keep your inventory management efficient. Make sure that it's clear to everyone within your company which method you use. Commonly used methods are Just in Time, FIFO and LIFO.

4. Ensure fast, reliable suppliers.

To keep your stocks up to date, it's important that you can trust your suppliers. Be critical in finding suppliers and keep them to the agreements.

5. Take care of the administration

In order to properly coordinate purchasing with sales, it's important that you know exactly how many products are circulating within your company. Make sure you have the administration in order so that you never order too much or too little. Finally, consider carefully whether the use of ICT " think of the bar code example " has added value within your company. A Warehouse Management System " WMS " as applied at supermarkets can provide many benefits for the administration of your inventory.

6. Take stock regularly

Keep a regular eye on whether the stock corresponds to what should be present according to the administration. How regularly you do this depends on the type of company you run. Make no mistake about the effort required for this so-called balance sheet. It requires great accuracy to properly map the available stock. You aren't required to value your inventory exactly for the tax authorities. You are only expected to make a good estimate of the value of your inventory.

Trend: RFID

Electronic Data Interchange " EDI " has been used for years for the electronic exchange of data in logistics. Within this technique there are a number of standards that are used. With the advent of the internet, the Extensible Markup Language " XML " is increasingly being used. The technology that's currently emerging and appears to have great potential is the RFID technology.

This technique, which is seen as the future replacement of the barcode, makes it possible to remotely store and read information from an RFID tag through radio waves. This technique is interesting for stock management because it makes it possible to know where the product is without physically scanning each product. In this way you can time even more precisely when deliveries arrive. Moreover, it has the additional advantage that stolen goods can be found more easily; the chip is of a miniscule size and can be hidden from the human eye.

The costs of an individual RFID tag are still too high " around 20 cents " to use thousands of tags in business operations, but this will change rapidly with technological developments. RFID certainly has the future in logistics and inventory management.

What are the benefits of good inventory management?

- You rarely order too many goods
- By setting the right priorities, the most important goods are always in stock
- A more complete stock in stock means fewer dissatisfied customers
- You incur fewer inventory costs

What can a review of your inventory management yield?

To gauge whether you're managing inventory properly within your company, it may be wise to have an external party take a look at your business processes. An objective look at your inventory management can result in valuable advice that allows you to better manage inventory and get more out of it for your company.


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