Why is Inventory Management Important?
Inventory management is important for keeping your stocks at the optimum level so that you avoid overstocking and at the same time reduce the chances of running out of stock. There are a few techniques that we can teach you and you can easily learn. You don’t need a graduate degree. You need a little training and a good computer with the appropriate software.
Typical overstocking problem at a major construction company. Overstocking is often the result of poor inventory control systems which results in stocks not being found and the staff resorting to emergency purchases. The stocks were there all along, but couldn’t be found in time.
Typical Inventory Problems
We have worked with many of the companies on their inventory problems and we see that the typical problems they face are the following:
- Lack of storage space
- Warehouses are full
- Lack of fast-moving stocks
- Too many non-moving stocks
- Stocks cannot be found quickly and accurately
Effective and accurate inventory control requires an understanding of the “ABC Inventory System”, the “Pareto Principle” as well as “Cycle Counting Techniques”. These techniques, coupled with proper recording systems and forms, can reduce you stock variance quickly to acceptable levels.
Solutions to these Inventory Problems
Most businesses do not have unlimited warehouse space. They also do not have unlimited resources to keep buying stocks. So just how much inventory should you keep? The following are a few of the Key Inventory Indicators that can help you keep inventory under control and make a profit:
- Average Inventory
- Inventory Turn-Overs
- Average Age of the Inventory
- Inventory Cover (Weeks of Inventory)
- Fill Rates (Service Levels)
- Re-Order Points
- Safety Stocks
- Forecasting Inventory
- Controlling Inventory
Managing inventory requires specialized knowledge in supply chain topics. These techniques are not usually taught in undergraduate courses. However, they can be learned by your inventory staff. There is no need to to go to graduate school to learn these techniques.
Inventory Planning and Planning Seminar conducted by Raffy Pefianco of RMP Consultancy for key staff members of Hotel Dusit Thani Manila.
Often a few simple mathematical equations are required to do the analysis. Fortunately, most office software suites like Ms Office and Open Office include spread sheet applications that can help you make the calculations.
RMP Consultancy regularly conducts in-house as well as public seminars on Inventory and Warehouse Management Topics. Click on the links below to learn more.
Please Contact Claire or Marco
Landlines: Tel (632) 8697-0767, Tel (632) 8372-4563
Mobile (Globe) 0917-882-5578, Mobile (Smart) 0918-937-3455
Or you can write an email to us and send it to:
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