Inventory management has been around for as long as there have been businesses that stock and sell products. Even in the bygone era of having main street village shops and trades, some kind of inventory management was used, even if it was only a brief daily stock take followed by simple restocking, manufacture and acquisitions.
In the modern age however, inventory management has taken on many new and deeper meanings. While the small village shop of old had little need for in-depth stock analysis and automation, a modern small to large business would struggle to operate successfully without them.
As inventory is one of the largest investments for many businesses, the use of inventory management techniques is a high priority and can add substantial value. And rightly so, for this is one of the main ways that businesses can actively reduce loss and waste while also increasing overall operational health and profits.
Let’s delve in a bit deeper and see what inventory management can offer businesses of every size and shape.
Maximize profits; minimize waste
With the use of good inventory management systems and software, a variety of tools and techniques can be utilized to minimize waste and maximize profits.
Every business with stock has some interest in acquiring accurate control over their inventory. Whether it’s a retail store tracking products or a manufacturer tracking raw materials, accurate control is necessary for operational health.
Inventory management provides a platform and a set of techniques to accurately track every item of stock and finished product in the supply chain. This helps to reduce the risk of loss from obsolescence, stock-outs and overstocks.
Without inventory management there can be no real streamlining or optimization. It’s the difference between having the lights on or off while searching for something in the dark.
Automation, cloud computing and mobile technologies
The importance of automation within inventory management cannot be overstated. There was a time when inventory managers would need to make adjustments manually, often spending hours pouring over data.
The arrival of computerized inventory management solutions however saw a revolution in how inventory management was approached and utilized. And now in recent years, another shift has come in the form of cloud computing and mobile technology.
Businesses can now set automated safety-stock levels, log all sales and orders in real-time and check their operations from the other side of the world.
Forecasting inventory and real-time analytics
Accurate forecasting is one of the holy grails of inventory management, especially for large business with a diverse and sprawling supply chain. While forecasting is never perfect, one the most important tools for accurate forecasting is accurate data. Any projections made will be useless without the full spectrum of data, something that most modern inventory management platforms deliver.