The word inventory basically means the stock within a company or lists of product. Within the world of business, managing inventories are essential to the efficient running of an organisation.
Different areas or departments of a business may have varying needs and requirements of inventory. They may differ on how much inventory they think there should be stockpiled for instance.
The finance department may want the inventory minimised to reduce working capital, which could oppose the sales department’s approach of wanting large volumes of product on hand to guarantee good customer service.
Finally the operations departments may want sufficient raw material to keep operations going, but may not want either small or large volumes like the finance and sales departments.
All these differing inventory requirements require careful management. Stock also needs to be of high quality and be effective in the right place at the right time, in sufficient quantities.
To achieve all of these things you need highly effective and specialised inventory management. It is not enough to go by previous experience or rule of thumb when dealing with stock requirements. An efficient business needs to carefully analyse its differing inventory needs.
It is important not to store stock away in case it is needed. With a few efficient inventory management tools businesses can make sure they have the right amount of stock at the right time, avoiding space and product wastage.
There are proven methods and formulas that can optimise the levels of inventory and balance the needs of all departments so that there is an efficient supply chain. These methods can harmonise the need for good customer service, the reality of available capital and the need for efficient use of equipment.
These inventory optimisation methods can be introduced with the input and agreement of all business departments. When implemented, such stock control policies often demonstrate the logic behind differing inventory levels and where changes or improvements could be made.
These formulas can ultimately help to balance all business sector requirements in terms of stock management. Specialised inventory optimisation companies can develop tailored policies and calculations like these to ensure a balanced inventory that addresses all company needs.
Inventory management consultants can work with your business on improving stock levels to suit all company departments. This will mean a balanced and efficient approach to inventory that increases productivity, profits and fosters a greater understanding between departments. Inventory optimisation can ultimately bring about a renewed willingness to work together for the benefit of the business as a whole.