The financial health of a company depends on efficient management of its economic resources combined with more productive processes, as well as good inventory management.
Without this management, the supply of inputs and even the sale of goods can be compromised, generating large losses.
This type of situation can drive consumers away from a business, as they cannot find what they are looking for. In addition, by not managing its inventory correctly, the company loses competitiveness.
Understanding the topic in depth can provide you with an extra level of knowledge, strengthening your strategic planning.
With that in mind, we prepared this article for you: a complete guide to the concept! Read on to find out more.
What is inventory management?
Inventory management involves controlling resources (time, money, and labor), inputs, products in development, and finished products in storage environments.
To do this, techniques are applied that aim to improve the conservation and rotation of items in warehouses and distribution centers, maintaining good stock rotation, prioritizing the highest-yield merchandise and organizing it so that it does not get stuck, damaged or lost.
This is one of the most important stages of the supply chain, as it is responsible for feeding the business that takes place at points of sale, e-commerce and other locations.
This process also seeks to reduce costs and generate a vietnam whatsapp data constant and appropriately structured flow of incoming and outgoing goods.
This allows for greater control over the budget, so that the purchase of products or supplies never leaves room for excess or lack of any product.
This claim can be verified by some data based on specific investments in the sector, such as what Easy Post discovered:
Companies can achieve a 25% increase in productivity, a 20% gain in space usage, and a 30% improvement in inventory usage efficiency if they process orders in an integrated manner using an inventory management system.
How does inventory management work?
How stock works in practice depends largely on the management model adopted in your company, something we will now understand more about.
However, it is possible to say that a stock is a temporary storage space for products. The objective is to sell, preferably in the shortest possible time, the merchandise stored there to free up space for new products.
If this does not happen, the company will need to develop strategies that encourage sales, with promotions and special offers – or elimination, in the latter case.
In this context, inventory management is a practice that helps the company clarify some essential points, such as:
what price you can pay;
at what price it can be sold;
when to start producing;
when to replenish your stock;
when to sell a particular product;
how much of an input you should buy.
It can be seen that, in the intrinsic scheme of integrated management, these are critical decisions for the business. Taking them without knowledge of the stock market situation can be extremely damaging for the company.
In some companies, inventory control is still manual and Excel spreadsheets serve as the basis for understanding product quantities, locations and values.
However, some small businesses and, now more consolidated, medium and large businesses, use a system that facilitates inventory control.
The most recommended is ERP, a software that allows the company to carry out all business planning directly in a single interface.
How important is inventory management?
Products that are out of stock generate higher levels of shortages on company shelves, display cases and shelves.