Speaker 1: Inventory Management Types, Benefits, and Methods Inventory management helps businesses decide what and how much to order. It tracks inventory purchases to sales. Trends are identified and addressed to ensure enough stock to fulfill customer orders and timely warning of shortages. Inventory sells for revenue. Inventory, an asset on the balance sheet, ties up cash before it sells. Thus, excess stock reduces cash flow and costs money. Inventory turnover measures inventory management. Inventory turnover measures stock sales in a period. No business wants more stock than sales. Dead stock results from low inventory turnover. Why Inventory Management? Inventory management reduces the risk of stockouts and inaccurate records, keeping a company healthy. Urbain-Zoxley, SOX, and SEC regulations require public companies to track inventory. Management processes must be documented for compliance. Inventory Management Benefits. Inventory management guarantees order fulfillment and boosts profits. Manage Inventory. Saves Money. Knowing stock trends helps you use your stock more efficiently. Since you can pull from anywhere to fulfill orders, you can keep less stock at each location, store, warehouse, and reduce inventory costs and unsold stock before it's obsolete. Proper Inventory Management helps cash flow by spending money on inventory that sells. Satisfies Customers. Fast Delivery Helps Build Customer Loyalty. Inventory Issues. Inventory Management's biggest challenges are having too much inventory and not being able to sell it, not having enough inventory to fulfill orders, and not knowing what's in stock and where. Other Challenges. Accurate Stock Details. You can't refill stock or know which sells well without accurate stock details. Poor processes, manual or outdated processes can slow down and cause errors. Customer Preferences Change Over Time. How will you know why their preferences change if your system can't track trends? Warehouse Use Well. Unfindable Products Waste Staff Time. Inventory Management Can Solve This. Inventory Management Challenges and Benefits. Inventory includes raw materials, components, and finished goods. Accounting considers inventory an asset. Accountants use the information about stock levels to record the correct valuations on the balance sheet. What is Inventory? Explains Inventory. Inventory vs. Stock. Managers call apparel and housewares stock on hand in retail stores. Across industries, inventory more broadly refers to stored sales goods and raw materials and parts used in production. Some say the UK uses stock for inventory more often. Inventory and stock are sometimes used interchangeably. Types of Inventory Raw Materials, Work in Progress, WIP, Finished Goods, Decoupling Inventory, Safety Stock, Packing Materials, Cycle Inventory, Service Inventory. Depending on their operations. Manual, Periodic, and Perpetual Inventory. Perpetual systems are most sophisticated and accurate, while manual methods are least. Perpetual Inventory System. Items are counted and recorded manually. Small businesses may use manual systems. Manual and periodic counts comprise periodic inventory systems. Periodic counts track inventory changes. Barcodes simplify stock taking. A database stores stock levels and locations. Perpetual Inventory System. Active RFID tags provide real-time stock data in perpetual inventory systems. Passive RFID tags send stock data to the database via scanner. Inventory Management Service Level. How much stock a company can store is its Inventory Management Service Level. It's the likelihood of avoiding stockouts and boosting sales. ERP helps inventory management. ERP tracks and analyzes supply chain operation, accounting, and purchasing, consolidating and making it visible for inventory management. Bad Inventory Management. Too much or too little stock is poor inventory management. Demand changes perfect balance. Trends and seasons affect sales. Stock mismanagement raises costs and lowers profits. Thank you so much for watching. Don't forget to subscribe our channel and like the video.

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