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The items that are stocked by the
company and available for use are considered inventory in the world of
business management.
The tracking and handling of these items is usually referred to as
inventory management. Inventory management is a multifaceted task,
comprising of monitoring the movement of material from one location to
another, reconciling inventory balances, creating efficient systems to
replenish inventory, setting inventory targets, and reporting on the
status of inventory, both actual and projected. Other tasks that can
also be included in inventory management include ABC analysis, cycle
counting support, and lot tracking.
Making sure the data for inbound operations is accurate and up to date
is of primary important for inventory management. Inbound productivity
can be greatly improved when this information is obtained in advance. It
should not be too difficult for your supply chain to assist you in
setting up an advanced inbound strategy and execution framework. The
best way to get started is to look at the information you already
receive and create a set of guidelines which will help you use that
information more efficiently.
One idea to help you further improve your system is to conduct a survey
among supply chain executives to determine the five most important areas
for improvement in support systems operations. You can be sure that one
area they will mention as very important is better inventory planning.
It is essential that the integrity of your inventory data be upheld and
that you aim for greater productivity and capacity utilization. There
are a host of issues that can arrive when inventory data is incorrect,
including poor customer service due to late or unfulfilled orders,
non-productive labor hours, and underutilized distribution center
capacity.
The largest asset of most companies is their inventory and distributors
have been searching for the best tools to help them manage this asset.
To meet the needs of these distributors software manufactures have
developed comprehensive inventory management systems and packages. These
have made vast improvements in the ability to manage the items in stock.
While these software packages have proved to be valuable tools they are
not the solution to all inventory management problems. The basic
principles of good inventory management still need to be followed in
order to achieve the very best results.
One of the key factors in good inventory management is protecting your
stock against theft. Special orders or non-stock items should be ordered
in only the limited quantity that your customer has requested. A
purchase commitment from a customer should be required when adding to
your inventory. It is also important to assign and use bin sites to make
order picking hassle free in your warehouse. All material leaving the
warehouse should be entered into the inventory management software.
Materials should be charged to either a salespersons account or a
customer to avoid “no charge/no paperwork” material swaps.
It is also important that you have proper paperwork, a plan for the most
efficient restocking of each item you keep in your warehouse, an
incentive plan for buyers, and a working plan to avoid excess inventory.
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