- The Importance of Inventory Control:
Inventor drives revenue profitability and customers satisfaction, yet retailers are losing an estimated billions dollars a year by not properly managing one of the their greatest assets.
Computerized tracking systems have emerged as a key component of business strategies aimed at increasing productivity and maintaining competitiveness. So how successful is your
business with inventory management here are 4 fundamental practices that can be started in the right way:
Supply and Demand
Basically, inventory management is about knowing your stock if there are enough products for offering to customers. If yes, you should consider the WHEN and HOW MANY that you will need to purchase more quantities to meet customer satisfaction. If not, the WHEN, HOW MANY and Why are needed to be thought deeply again.
In the class, our professor highlighted ,
“to have a huge quantities in the warehouse is not a good way, it will lead holding cost increases and ,customer purchase would be changed in the next year or in the next order. Especially for the seasonal products, which benefit depends on the climate condition”.
-Obviously, inventory needs substitute /replacement of suppliers(factories).When is out of stock,it is not available to place the order as usual in cooperated factories, it could failure of the delivery time is too long and is putting customer in a long waiting process. For instance, to find out another option to backup and maintain the quantities in stock is inevitable. What’s more, this occasion could happened when customers received defective items or lack of some spare parts, whom are urgently needed to gain the warranty products asap to satisfy customers needs. The more quantities of good it have , the more risk that it warehouse should be taken.
-The maximum and the minimum quantities of the stock are not be able to predict precisely. Decision makers purchased the quantities, model of products and decide the date to be arrived in warehouse just according to the average sale per year, per season,or per month.
-Control the inventory help making decision correctly, reduce the business cost, use the warehouse to have those goods, but NOT FOR HOLDING THEM.
-One more interesting point that José added at the end of the class:
People feel stressed when they are not stocked , customers would not prefer to see the color of pallet then they won’t buy that product which is not in shelf just because of phycology effect in Customer Purchase Behaviour.
For instance, inventory management is a curiously topic to learn and each theory class we have had will explain clearly what happened in our daily life.