The Importance of Inventory Management in Supply Chain Management
The management of inventory is necessary for any company so that excess stock is not stored at the company while simultaneously ensuring demand for customers is met. The optimal balance, however, is often achieved through properly planned and managed inventory.
Inventory control software optimizes the economic order quantity (EOQ) of businesses. The EOQ is the optimal inventory a business should purchase to minimize the cost of ordering and holding. This type of software helps regulate inventory stored in the warehouse, understand how to maximize inventory layout, and ensure there's enough product to sell at every point.
Small businesses often use a stock book, or log book, to keep track of inventory. The number of inventory items is listed in one column in the book, and sales are written in another column. This allows managers to keep track of how many items have been sold. This can also be done on computer.
Inventory management software is software designed to track and manage items through various stages along the supply chain. Features include stock level management, inventory item categorization, sales order and purchase order tracking, barcode scanning, and automatic reorder point purchasing.