Inventory management refers to the process in which a business looks after, organizes, and keeps track of its physical assets, materials, and stock.
This includes everything from purchasing inventory, to storing it in warehouses or at other locations, to shipping it. The degree of complexity for inventory management depends significantly on the size of the company, and a number of physical products that it sells.
Why is inventory management so important?
Inventory management is a crucial aspect of many businesses. The reason is that inventory is typically a primary asset of a business. Inventory can be worth millions of dollars, and its eventual sale can be crucial for the survival and success of a company. If inventory is mismanaged, lost, or stolen, it can cost a business a substantial amount of money.
Inventory also costs a lot of money to store, ship, and keep organized. So, inventory management is also a significant expense for many companies. Essentially inventory management is important because it is vital for the proper functioning and prosperity of a company.
How is inventory management conducted?
There are a number of ways for businesses to conduct inventory management. For example, a business can have people who are responsible for organizing and calculating inventory. This can include counting how many items the company has in its stores, knowing where these items are, knowing when they will need to be reordered, etc.
Before modern technology, this was how most companies performed inventory management. Pencils, paper, and calculators were the primary tools for performing these tasks. However, thanks to software breakthroughs, much of inventory management can now is now automated, and can be monitored using mobile phones, tablets, and laptops.
A closer look at modern inventory management methods
With modern inventory management and MRP technology, inventory stores can be kept track of online. When sales are made, the software will automatically change the inventory information to reflect the sale. This prevents a person from having to try to keep track of every single sale in order to know what the company’s current inventory is.
Because all of the inventory information is online, it can also be organized by quantity, by value, by location, etc. So, inventory managers can get a wide variety of information about their inventories simply by altering the search settings. Inventory information can also be automatically updated when inventory is moved or shipped.
The automation and digitalization of inventory management help companies to be more efficient. This is especially true considering the fact that many companies can now simply rely on using mobile devices to keep track of their inventories. 67 percent of warehouses now plan to use mobile devices for inventory management.
Modern inventory management methods have the potential to dramatically improve efficiency and reduce costs for many companies. Considering the fact that inventory management is something that many companies have to do on a permanent, and very frequent basis, savings and improved efficiency in this department can have extremely positive consequences.
Not only can modern inventory management methods allow companies to manage their inventories with fewer employees, but they can allow companies to manage them with greater oversight, speed, and accuracy. Even small and mid-sized businesses can benefit tremendously from modern inventory management methods.
If you are interested in obtaining inventory management software for your company, then SAP inventory management is an excellent option for you. SAP inventory software can help to streamline and optimize the inventory management process for your company. Please feel free to contact SAP today to learn more about how their inventory management software can help you and your company!
Ashley is a freelance writer, blogger and digital marketing professional living in Denver, Colorado. She specializes in crafting content that attracts and converts customers.