Updated at 13/06/2022 - 04:36 pm
Warehouse and inventory control systems help businesses monitor and track the amount of raw materials, finished products and work in progress the company has on hand at all times. Businesses rely on information in their inventory control systems to make purchasing decisions, production schedules, and inventory needs. Accurate inventory systems help small businesses keep costs low and deliver products efficiently to meet customer needs.
These are important aspects of inventory management #
Quality #
An inventory control system tracks quantities, but businesses can also use the system to track batch numbers of raw materials and finished products. Tracking batch numbers allows businesses to track materials during production. When a company discovers quality problems or defects, tracking systems allow the business to isolate raw materials and finished products that may contain defective materials. The tracking system also allows businesses to work with suppliers to identify defective materials.
Inventory control can also allow a business to track the shelf life of materials. Businesses that use an inventory control system can ensure the company uses materials on a turn-by-date basis. Warehouse and inventory control systems must provide an effective method for workers to identify and pull old inventory before the expiration date.
Purchase #
An effective inventory control system is vital to the purchasing activities in a business. Buyers rely on accurate inventory data to determine when to purchase inventory materials. When inventory information is incorrect, buyers may purchase too many or not enough quantities of materials. Inventory control systems can use triggers to signal to buyers that it's time to replenish the company's inventory. Inventory levels are one of the triggers that buyers use to determine when to buy more. Inventory level is the amount of inventory the company has at all times. Businesses can use usage and replenishment time data to set inventory levels. When the quantity on hand reaches the inventory quantity, the buyer buys more stock.
Not having enough stock to meet customer demand can lead to late deliveries and loss of business for a company. Buying too much inventory wastes warehouse space and tightens the business' funds.
Transport #
The inventory control and storage system a business uses also tracks finished goods, which the shipping department uses to track and store finished products. A quality inventory control and storage system allows the shipping department to ship products to customers in an efficient and timely manner.
Cost #
The storage of raw materials and finished products incurs costs for a business. Warehouse and inventory control systems can help manage costs by controlling the amount of materials a business has to keep on hand. Some businesses use lean systems, with a minimum amount of stock available to keep inventory and storage costs low. A company with a lean inventory system buys materials only when there is a need for it. Lean inventory reduces material, warehousing and material handling costs. However, delays in deliveries from suppliers or an unforeseen increase in customer demand can result in late deliveries or loss of business for a company that uses using a lean inventory system.
