Inventory monitoring and control is a core activity in your company since having reliable visibility of it you can make better decisions in addition to reducing costs by not carrying excess or shortage of merchandise and therefore offer a better service to your customer. Also, having optimal inventory levels can help you free up cash flow.
Inventory management is a mechanism in which a company manages the efficient management of the movement and storage of goods and the flow of information and resources that arises from this.
Inventory Control Indicators
To fully understand how inventory control is measured, you need to take into account 3 important indicators:
1) Maximum Stock
It is the maximum quantity of a certain item that you want to keep in your warehouse according to the cost it represents for your company and the time it takes to sell it to your customers. Certain companies consider it convenient to have a large inventory in specific cases such as:
- The product has a very high turnover or a defined temporality has been identified.
- The cost of storage is low and that of transporting it high.
- The supply time by the supplier is long.
- There is speculation about increases in the price of products and/or materials
2) Minimum stock (safety)
It is the minimum quantity of a certain item that you want to keep in your warehouse, which, if it is less than the minimum required, can generate a significant supply problem and losses for the company. When is a company interested in keeping its inventory level low?
- When the delivery time from your supplier is immediate.
- When the costs of placing an order are low, regardless of frequency or quantity.
- By identifying the item as low-moving and sometimes high-cost.
- When there are highly trusted agreements with suppliers.
- It is speculated that there will be a decrease in the prices of the good.
3) Reorder point
It is the level of stocks where the order must be made to restock the warehouse considering the times of the suppliers and not having supply problems.
What benefits does having an inventory control system have for your company?
Inventory management and control is a process that has a great impact on all the operational areas of your company and in turn is a fundamental aspect of the administration since when you do not have it controlled it implies a high cost and requires a greater investment/cash, all this can be done with the help of inventory management companies in India.
When competition is fierce, companies cannot afford to have money stuck in the form of merchandise in their inventory, nor can they be unable to provide excellent customer service by running out of supply.
The objective is to achieve that balance between supply and demand, as well as to have reliability in the times of receipt of merchandise from your supplier as well as in the delivery to your customers.
Contacting an inventory management company brings with it multiple advantages for your company by providing important and timely information in real time that will help you have better planning and make the pertinent decisions to be more efficient.