Inventory Management

Inventory Management. “inventory as all the money that the system has invested in purchasing things which it intends to sell. ’’.

[Audio] inventory is the raw materials used to produce goods as well as the goods that are available for sale. It is classified as a current asset on a company's balance sheet. The three types of inventory include raw materials, work-in-progress, and finished goods. Inventory is valued in one of three ways, including the first-in, first-out method; the last-in, first-out method; and the weighted average method. Inventory management allows businesses to minimize inventory costs as they create or receive goods on an as-needed basis..

[Audio] Definition Meaning Example Benefits of Inventory Management Inventory Management objectives Importance of inventory Management Challenges Faced in inventory Management Types of Inventory Management.

[Audio] Inventory Management is an approach for keeping track of the flow of inventory . It starts from Procurement of goods and its warehousing and continues to the outflow of the raw material or stock to reach to the manufacturing units or to the market respectively. The process can be carried out manually or by using automated system. When the Goods arrive at the designated delivery point/ Premises. Inventory Management Ensures Receiving Counting sorting Arrangement storage and Maintance of these items.

[Audio] To see this whole system functions. We should first try to understand the flow of inventory in an organisation. The same has been represented in the following Diagram. The goods which are stored in the warehouse can be utilized in the following two ways Direct Distribution in the market : Wholesalers Dealers retailers or customers Sent to the production units for Manufacturing of finished goods ..

[Audio] Inventory Management techniques available EOQ – Economic order quantity ABC Analysis Just in time EQR Model VED Analysis LIFO FIFO.

[Audio] Keep track of your inventory and offers a centralised view of stock Controls costs by making stock report for analysis of your inventory Improves your delivery by managing stock outs and meeting customer expectations Analysing data trends for managing planning and forecasting Reduces the time for manging inventory by keeping records in place.

[Audio] Preventing of dead stocks or perishability – with an optimal inventory level . The chances of wastage in the form of goods spoilage or dead stock Optimizing storage cost . It reduces the chances of maintaining excessive stock. Even the requirements are pre determined which helps in cuts down the unnecessary warehousing / fulfilment cost Mainting Sufficient stock : The production units need not worry about the shortage of raw material of goods because of its constant flow of supply Enhancing Cash flow : Inventory has a significant impact on the cash flow of the company . With effective inventory controls and management . The organisations can ensure sufficient liquid cash to enhance its operational efficiency . Reduction the inventories cost value / the constant purchase of goods or stock the organisation are in better positions to ask for volume discounts and other commercial related benefits to decrease the purchase price..

Importance of inventory Management. Enables enterprise resource Planning (ERP) Warehouse management systems Efficient Inventory valuation Support supply chain management Manages sales operations.

[Audio] ERP – Enables enterprise resource planning. The ERP software accommodates and links the different business operations. These are inventory procurement , warehousing , Human resource finance marketing and sale to one another .in this process ,the inventory management contributes its part of providing the necessary data. Proper warehouse Management. The barcode system . LIFO AND FIFO techniques provide a clear picture of the past and present inventory available with the company to optimize the warehousing functions.

[Audio] Efficient Inventory valuation It provides for proper evaluation of the different types of inventory . Stock in hand . Opening and closing stocks , raw material finished stocks etc. this data is also used to prepare the cost sheet . Support supply chain management . Responsible for streamlining all the warehousing operations and flow of raw material and stock Manages sales and operations ; Since we are all aware sales is continuous process which is depends upon the production of goods or services ..

challenges faced in inventory Management. Inventory Management has been an inevitable part of significant business entities . All companies big or small have adopted the concept to keep of their stocks and raw materials . While practically implementing it. The organisations have to deal with fowling limitations Lack of knowledge Expanding product portfolios Supply chain complexity.

challenges faced in inventory Management. Lack of knowledge : The warehousing staff at the time of receiving and during the warehouse operation process may lack the required the adequate knowledge of segregating the regular and seasonal goods out of the whole stock . Expanding product portfolios The demand of customer for buying of different stock range of products have resulted in increase the inventory size. Making it difficult to Manage manually. Supply chain complexity‘ The organisation at times due to sales pressure or month end pressures fail to keep track of stock of goods during supply chain process which results in inventory challenges during stock audit for both ornazation and business partners ..

[Audio] Inventory Management has been an inevitable part of significant business entities . All companies big or small have adopted the concept to keep of their stocks and raw materials . While practically implementing it. The organisations have to deal with fowling limitations Lack of knowledge Expanding product portfolios Supply chain complexity.

Bar code inventory Management .. The Barcode system is its automated and simplified version. The Management can find out the stock remaining with just one click on a computer device. The scanned barcodes enable the software to maintain and keep track of the all the purchases and the flow of inventory..

[Audio] It links the barcode and radio frequency identification with the accounting inventory system , Inventory received and point of sales systems along with the production system to trace the termed as perpetual inventory Management.

Periodic Inventory Management. It is manual process which is used for determimg the closing inventory value for putting up in the ledger at the end of fin year closing Depending upon the organisation/ Business unit needs . It can also be analysed monthly /quarterly . It is a time consuming way ,since the inventory has been to physically counted.

[Audio] Conclusion Inventory Management is a useful method for all simplifying all the warehousing activities of the organisat ion. With this Process Can access and determine its stock and inventory with efficiency to smoothen all the business operations . Provides valuable Tool for Maintaining the working capital requirement.