Inventory Management is part of Supply Chain Management.
What is Inventory Management
Inventory Management is part of Supply Chain 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 utilizing
sophisticated mathematical models are can predicate future demand from 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
activities. Demand forecasting is an ongoing process. The frequencies of forecasting depends on the length
of acquiring inventory items. Some businesses may run forecast monthly, while others may need weekly forecasting.
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. Items used for special
events, roadshows, or kitting are common causes that result count discrepancies, 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 canned/static
or ad-hoc forms. Static reports provide periodical summary of inventory items and usages.
Ad-hoc reports allow users to look at inventory in criteria they prefer - by SKU, product category,
product type, or item owners.
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