To understand inventory control it is necessary to understand what inventory management is? Inventory management is an important part of business. It involves planning, organizing and controlling of the stock. The objective of inventory management is to provide uninterrupted production, sales and/or customer service levels at the minimum cost. Proper inventory management helps in avoiding under stocking and over stock of inventory. Inventory control is an important aspect of inventory management. Inventory is the list of moveable items which are required to manufacture a product or to maintain equipment. Inventory is a unique item having identification number, nomenclature and specification. Following are the types of inventory:
o Raw materials
o Work in progress
o Finished goods
Inventory control means to monitor the stock of goods used for production, distribution and self consumption. It means maintaining the inventory at desired level. Inventory control is defined as “the process whereby the investment in material and parts carried in stock is so maintained that the flow of material is properly maintained for smooth and continuous operations of production and sales and the costs of investments in inventories are kept at the lowest level possible”. Inventory control refers to a system which ensures the supply of required quantity and quality of inventory at the required time and at the same time prevents unnecessary investment in inventory.
It is very important to maintain accurate inventories in order to unsure the smooth working of an organisation. Following are the top ten reasons why one should maintain accurate inventory in an organisation:
Helps you -
1. Not to miss sales due to out-of-stock items.
2. Not to waste cash in overstocked inventory.
3. To improve the accuracy of your accounting and profit reporting.
4. To identify issues before they get out of control.
5. In customer service.
6. In efficient re-ordering.
7. To minimize theft and losses.
8. To trust in your information.
9. To minimize warehouse costs.
10. In efficient stock take and end-of-year process.