Wednesday 11 February 2015

Significance of Systematic Inventory Management

Authored by Fahad Amjad

In order to understand firstly what is actually concept of inventory management is that inventory management is the assets of any organization that are considered to use in the production of any goods and services refers to sales or any other consignment. There are different types of Inventory management i.e. Raw material goods, pending work that are considered in work in progress and the final or finished goods. The main key of successful inventory management is to maintain the  internal control over inventory which includes any kind of damage or theft , tracking of different purchase orders etc.

Inventory management is the essential part of the process of complete procurement cycle. Managing the inventory is very important to the success or smoothly operations of any organization. Inventory management also helps organization in the matter of their cash flows. Inventory management involves a process that helps to identify the inventory needs, it helps to set the inventory targets and status of goods in their stocks. The companies who do not have the efficient inventory management systems are leading them towards excessive unnecessarily costs and expenditures which effects the customer services level. Inventory management facilitates maintaining sufficient inventory for untroubled sale and productions operations. It also helps about the stock out problems which ultimately can effect the repute of the organization and disturb the customer services level. It actually helps to minimize the administrative workload and even over all operations cost. It also helps to maintain a check and balance of loss of materials due to the negligence and it also helps to identify duplication in the stock ordering.