[[{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is inventory management?","text":"Inventory management is the discipline of monitoring and handling raw materials and the products made from them. On the input side, this includes specific tasks such as sourcing, buying, receiving, storing, moving, selling, and shipping of materials used to make a company\u2019s products. Managing inventory output involves storage of finished products as well as sales and shipping to customers.","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What are the benefits of inventory management?","text":"
  1. Increased efficiency<\/li>
  2. Reduced costs<\/li>
  3. Improved customer satisfaction<\/li>
  4. Better cash flow management<\/li>
  5. Better decision making<\/li>
  6. Increased profits<\/li> <\/ol>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer1"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is the process of managing inventory?","text":"

    The 5-step inventory management process:<\/p>

    1. Receive and inspect products.<\/strong> Establish a smooth and efficient process for receiving and inspecting shipments to help keep materials moving. Inspect your shipment to ensure that you're using the highest quality materials and not paying for damaged or poor-quality products that will either need to be returned or thrown away, or, worst case, end up in your products.<\/li>
    2. Sort and stock products.<\/strong> Pre-production, determine which products and materials need to be delivered to production and which need to be stored. Post-production, move finished products to the appropriate storage areas to away customer orders and order fulfillment.<\/li>
    3. Accept customer order.<\/strong> Whether e-commerce, brick-and-mortar, or otherwise, take customer orders and ensure that all parties have visibility into the orders and information needed. Internally, make sure sales, warehouse, order fulfillment, and shipping know what's going on.<\/li>
    4. Fulfill, package and ship order.<\/strong> Ensure that the customer knows that you've received their order and can easily find out when it will ship and when it's expected to arrive.<\/li>
    5. Reorder new stock.<\/strong> Maintaining accurate physical inventory is vital. Knowing when and how much to order depends on accurate, current inventory data.<\/li> <\/ol>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer2"},{"@context":"http:\/\/schema.org","@type":"Answer","text":"

      Types of inventory:<\/strong><\/p>

      • Raw materials<\/strong> are the items, components, and products needed to make a product.<\/li>
      • Work in process<\/strong> is your product being manufactured, when raw materials and components are combined with the labor of workers and machines to make what is sold.<\/li>
      • Finished goods<\/strong> are the completed products ready for sale and shipment to customers.<\/li>
      • MRO goods<\/strong> (MRO stands for maintenance, repair, and operating) are the materials you need to keep making products and doing business, a form of overhead that's considered the cost of doing business.<\/li>
      • Transit inventory<\/strong> describes finished products that have been sold and shipped to the customer, but yet not delivered. This stretch of the journey is also called transit, pipeline inventory, and transportation.<\/li>
      • Buffer inventory<\/strong> is the same as safety stock, serving as an emergency reserve to avoid running out of inventory before stores can be replenished.<\/li>
      • Anticipation inventory<\/strong> is similar to buffer or reserve stock, but is obtained and produced to meet a forecasted increase in demand, especially cyclical or seasonal increases.<\/li>
      • Decoupling inventory<\/strong> is a strategy that sets aside certain quantities of product in various stages of the production process to keep manufacturing moving in case there's a shortage or breakdown anywhere along the line.<\/li>
      • Cycle inventory<\/strong> is kept on hand so businesses can maintain minimum production quotas. This also takes the form of raw materials and components needed to fulfill those quotas.<\/li> <\/ul>","name":"Types of inventory","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer3"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What are the primary inventory management techniques?","text":"

        Four most popular inventory management techniques:<\/p>

        1. Just-In-time management (JIT)<\/li>
        2. Materials Requirement Planning (MRP)<\/li>
        3. Economic Order Quantity (EOQ)<\/li>
        4. Days Sales of Inventory (DSI)<\/li> <\/ol>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer4"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is an inventory management system?","text":"An inventory management system (IMS) governs and executes your process for tracking products from input inventory of raw materials and information through the manufacturing, storage, sales, and shipping processes.","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer5"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"Types of inventory management systems","text":"

          Here are three IMS types:<\/p>

          1. Manual inventory systems<\/strong> are the old-school way, counting each item and updating locations by hand.<\/li>
          2. Periodic inventory systems<\/strong> have the team count physical inventory every month or quarter. Bar code systems can be a quicker, easier, and more efficient way to count and track inventory by scanning the barcode on a product.<\/li>
          3. Perpetual inventory systems<\/strong> count and track inventory automatically using software to update inventories when materials, components, and products are purchased or sold.<\/li> <\/ol>","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer6"},{"@context":"http:\/\/schema.org","@type":"Answer","text":"inventory control\u2014also often called stock control\u2014oversees the logistics and movement of materials and products within a warehouse or system of warehouses.","name":"what is inventory control?","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer7"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is inventory?","text":"Inventory is the collection of goods and materials held by a business for manufacturing or sale. Inventory includes raw materials, work-in-progress goods, and finished products. Optimal levels of inventory helps support production, fulfills customer demands, and ensures efficient business operations.","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer8"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is inventory management software?","text":"Inventory management software is a software application that helps businesses with tracking, orchestrating, and optimizing its inventory related processes. An inventory management system offers real-time insights into inventory levels, order management, and reporting functionalities. Leveraging an inventory management software ensures effective inventory control, streamlined order management, and data-informed decision-making for businesses.","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer9"},{"@context":"http:\/\/schema.org","@type":"Answer","name":"What is inventory planning?","text":"Inventory planning is a strategic business process of forecasting and determining optimal levels of inventory at the right time and right stage in the process. Inventory planning helps businesses meet customer demand while minimizing costs. The process of inventory planning involves activities like demand forecasting, lead time analysis, and safety stock planning. Effective inventory planning ensures a fine balance between having sufficient stock to meet customer demand and avoiding excessive inventory costs.","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer10"},{"@context":"http:\/\/schema.org","@type":"Answer","text":"Stock management and inventory management are similar in concept, but have some key differences. Stock management specifically focuses on managing optimal levels of finished goods, whereas inventory management is a much broader process that is inclusive of stock management. Stock management involves tasks such as order fulfillment, shipping, and returns. While both processes are related and aim to balance supply and demand, inventory management has a wider scope, encompassing the entire supply chain.","name":"What is stock management, is it the same as inventory management?","@id":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#Answer11"},{"@context":"http:\/\/schema.org","@type":"BlogPosting","sameAs":"https:\/\/en.wikipedia.org\/wiki\/Field_inventory_management","about":["http:\/\/www.wikidata.org\/entity\/Q815410","http:\/\/www.wikidata.org\/entity\/Q3761396","https:\/\/en.wikipedia.org\/wiki\/Inventory_management_software","http:\/\/www.wikidata.org\/entity\/Q6059927","https:\/\/en.wikipedia.org\/wiki\/Inventory","https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/#About"],"dateModified":"2023-09-19","keywords":["Supply Chain","Inventory Management","Future of Supply Chain"],"url":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2023\/04\/11\/what-is-inventory-management\/","name":"What is inventory management: Definition, benefits, techniques","headline":"What is inventory management: Definition, benefits, techniques","datePublished":"2023-04-11","description":"Inventory management is the discipline of managing raw materials and the products made from them. Explore the benefits and techniques.","abstract":"Inventory management is the discipline of managing raw materials and the products made from them. 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