One of the most important things for any business to hold onto is its customer's trust. the demand of the customer needs to meet while utilizing minimal inventory. As such companies must have just the right amount of stock, excessively stocking would require the allocation of more fund in order to manage the inventory. Over time this could be bad for the companies profitability. the important thing is to prevent the insufficiency of stock, which if it happens, could result in the loss of customers and consequently sales, causing the reputation of the company to suffer.
A lot of companies build their supply chain systems only to focus on transactions, counting what happens and ensuring visibility. However most of the time they neglect to take care of their inventory, which when managed efficiently, can help drive the supply chain to operate more efficiently and save unnecessary expenses lots of companies.
without any doubt, you need inventory.it is what you make, and what you sell. Cutting it too low and not having what customer wants, at the place and time they want it, will only result in the loss of sales. Of course, there are a lot of choices available to customers in the market, and the general rule of thumb is that they are very likely to switch to another product half of the time if you can't deliver.
That is where inventory management comes in..it helps to keep a balance between inventory and customer service levels, by ensuring a high percentage of time you deliver goods to the customer as ordered and promised. Inventory is just like any other type of investment, it requires the right mix of risk and return. the risks are locking up cash in too much inventory or losing revenue because of business running out of stock. The return of this is rapid asset turnover into cash.
Inventory management calculates inventory and service levels automatically and dynamically to meet business objectives on an ongoing basis and direct your supply chain accordingly. It lets you specify the aggregate inventory and service level balance that works right for your company, even vary it across products, customers, time intervals and geographies.
These are important factors that can help you decide on the warehouse design that you are to create. It should be able to promote the organization, productivity, and profit fro the business. A lot of business owners tend to overlook or even ignore the presence of their warehouse. They do not realize the role that this storage place gives to the business.
It hedges for the daily demand and supplies volatolitу and random behavior across your supply chain, from finished goods assembly to the end consumer or retail self. It also can handle challenges like promotions, expiration and shelf life, end of season closeouts and new product launches.
In essence, inventory management is important for the smooth flow of products and operation of the business. It is very crucial in this period of numerous alternative product and shorter product lifespan.