Inventory Management: Why is it important?

It seems like a question with a very logical answer: inventory management is important to keep track of the company’s stock. But, do you think that in addition to this informative contribution, can it help you to do something else with this management?

The definition of inventory management is the proper administration and recording of the materials and stocks owned by a company. It is important to know the flow of articles or products that we have in our warehouses or stock in order to be able to make an optimal follow-up.

Inventory management keeps track of how many products there are of each type. We can even find out where they are in our warehouse. And, also, it is very important to know the rotation of stocks, the dates of entry and expiration, etc.

Depending on the type of product our company has, stock tracking will be more or less frequent. Efficient management is essential to avoid running out of stock, loss due to expiration or obsolete products, etc.

To carry out inventory management, one of the key processes is to carry out an inventory.

To accomplish this task we must follow these simple steps:

• Extract a list of existing products and articles where the available quantity appears.
• Count and check that the list extracted from our database matches the real products and stock.
• Check that the existing products are suitable for sale (not expired, discontinued or obsolete)
• Remove those that are not suitable for sale.
• Update the database with the actual results.

These are the basic steps in carrying out an inventory, but depending on the company, the product or other aspects, these steps may vary.

The basic objective of inventory management is to avoid losses that can occur for different reasons. Failure to manage rotation optimally can lead to losses of perishable products. We can also have losses of income in sales if we have stock breakage, or losses by having more.

Keeping products tidy and organized in their locations helps us in this process and makes inventory management easier.

Other of the objectives of inventory management is to check that the real stock coincides with what appears in our DDBB. It also helps us to take into account whether we should use the LIFO or FIFO methods according to whether we want the references that entered before to be sold first or vice versa.

We will also know when to order. Knowing the real stock is essential for the digital catalogue management and thus always have updated the quantity and what items are available for immediate sale.

The primary objective, as we saw above, is to be supplied to satisfy the customer by avoiding losses by not being able to sell.

That is why it is a condition “sine qua non” to define how our inventory management should be. With what periodicity it has to be carried out, who is going to carry it out, what tools we can use,…

It will also be necessary to take into account whether there is any type of regulation regarding our product that requires more detailed monitoring.

Therefore, it is necessary to take into account to define an optimal management, at least these points:

• Periodicidad.
• Responsable (o responsables) de la realización del inventario.
• Herramientas o software que faciliten la tarea.

Having an updated inventory is important, as a company’s stock is one of its primary assets.

Defining how our inventory process should be is fundamental. In this way we will configure the parameters to follow to make the inventory useful and efficient. Whether or not it is worth doing it more or less often, whether it is necessary to do it for all the products or only part of them, etc. We cannot waste time in making inventories that are not necessary, since the cost of personnel time must be taken into account. And not doing it as often as needed can cause us not to realize a need to add stock, renew products or others.

A tool that allows us to easily carry out this task will save us time and money. There are applications such as urInventory which, with a barcode reader, easily performs this inventory management.

In addition, if you need your salespeople to know at all times what stock is available for immediate delivery, try our CRM Demo. That way you will be able to indicate in the web the available stock and the commercials will be able to see it from the app. This way they will know at all times if they have product of immediate delivery.