What is Inventory Management
Inventory Management is the systems and processes of maintaining the appropriate level
of stock in a warehouse. The activities of inventory management involves in identifying
inventory requirements, setting targets, providing replenishment techniques and options,
monitoring item usages, reconciling the inventory balances, and reporting inventory
status.
Inventory Planning and Demand Forecasting
A key to inventory planning is accurate demand forecasting. Software systems are
available for predicating future demand using historical usage data. The accuracy of
the demand forecasting is largely dependent on how unusual usage is treated in the
demand forecasting. It is imperative that historical usage be corrected for any unusual
activity. Demand forecasting is an ongoing process. Inventory management software
systems can alert inventory owners at the frequencies of their preference, whether it's
on a weekly, or monthly basis.
Inventory Monitoring and Balance Reconciliation
Inventory Monitoring involves activities of monitoring arrival, use, shipment and
disposition of inventory items to ensure the accuracy of inventory management. When
a discrepancy occurs or the actual quantity physically counted doesn't match the stock
level in the computer system, inventory specialists need to reconcile the discrepancy in
terms of cycle counting. A cycle counting program can improve your business processes,
ensuring the correct recording of material movement, proper stocking of inventory items
and accurate order fulfillment.
Inventory Reporting
Various reports are indispensable for inventory management. Reports can come in static
or ad-hoc form. Static reports provide periodical summary of inventory items and usage.
Ad-hoc reports allow users to look at inventory in criteria they prefer. The users can
generate item summary report or usage summary report by product type, product line,
payment methods or fulfillment options.
Related Topics
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Drop Ship Your Way to Wealth - Drop Shipping to the Rescue
What is Fulfillment - Definition, Product Fulfillment and Service Fulfillment
Fulfillment Company, Fulfillment House or Fulfillment Center
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