Modernising Supply Chains with Innovative Inventory Management Module

What Is Inventory Management?

Inventory management controls a company’s supplies, including production, acquisition, storage, and retail sales. The Inventory Management Module is the program used to carry out this function.  This involves overseeing the processing and storage of components, raw materials, and final goods. A well-managed inventory helps a business stay structured. Additionally, it offers vital information that companies need to stay profitable, react to market trends, and prevent supply chain management failures. 

 

Types of Inventory Management Module

The following are the four primary categories of inventory:

 

Raw Material

Raw materials are those that are used to make finished goods. They typically show up early in the production process. Metal, plastic, fabric, and wood are examples of raw materials that are mainly used to make finished products. They could originate from one or more vendors.

 

Work-in-progress (WIP)

The product is being processed, and the workers are working on it. By using different equipment, they try to make the complete product and give it a finished look and then charge the cost of goods. 

 

Finished Product

Finished goods are products ready for customers to purchase and kept in stock. Once a work in progress is finished, it is added to the inventory of final products.

 

MRO Products

Parts of machinery and supplies used in production but not included in the finished product are known as maintenance, repair, and operations goods (MRO). Personal safety equipment, clean-up and office equipment, and other items may be included in this.

 

Characteristics Of Management Module

 

Inventory Monitoring 

One of the primary goals of the inventory management module is to enable real-time stock item monitoring. This entails tracking products with batch numbers, keeping track of stock levels, and providing customers access to stock locations in storage areas.

 

Storage Management

When Integrated inventory management software and warehouse management systems (WMS) are used, they enhance storage operations. These include placing orders, buying things, replenishing stock, packing, and letting customers pick up their stuff.

 

Order management

These systems facilitate the creation, processing, and acquisition of purchase orders. This software lowers the possibility of human error, which is very common in manual labor, by automating every step from purchase to sale and then assisting in reordering the stock.

 

Demand Forecasting and Inventory Planning

These two functions are commonly included in the inventory management system. These systems assist businesses in more accurately forecasting future demand by utilising current market conditions and previous data. This aids in their inventory control and

 

Inventory Optimisation

The sophisticated inventory management software uses methods and optimisation techniques to maximise inventory levels based on variables like lead times, customer demand prediction, and storage expenses. Businesses can reduce holding costs and maintain optimal stock levels by optimising their inventory.

 

Vendor and Supplier Management

These inventory management modules enable businesses to handle their dealings effectively with suppliers and other companies. Additionally, this software aids in contract management and purchase process automation.

 

Techniques for Inventory Management

Depending on the size and structure of the company, different inventory management techniques improve operations in the end by controlling expenses and cutting waste. Here are some typical techniques:

 

Exactly when needed (JIT)

Coordination of inventory arrival with production commencement is the foundation of Just-in-time (JIT) inventory management, which seeks to minimise costs and increase efficiency. This tactical move attempts to reduce inventory holdings as much as possible while satisfying the product’s high-volume production requirement and lowering the likelihood of financial waste. You’ll need to closely maintain relationships with trustworthy suppliers and accurately forecast your needs if you want your JIT inventory business to succeed.

 

Advantages

•  Cuts down on wasteful stock
• Reduce expenses by not having unsold inventory
• Prevents requiring more storage space than is necessary for inventory

 

Planning for material requirements (MRP)

Material requirements planning (MRP) is a supply-chain management tool that helps manufacturers determine how much inventory is required to meet the customer’s needs for a particular product. MRPs consider the types of materials required, the amount of material needed, and the date for production completion. They are dependent on demand and the bill of materials (BOM).

 

Advantages

• Provides companies with a balanced inventory
• Enables companies to have the appropriate stock of materials for manufacturing
• Removes manual tasks like examining historical sales data and current inventory

Quantity of economic orders (EOQ)

The best order size to meet demand while staying within budget is determined using a formula called the economic order quantity (EOQ). Regardless of size, every business that handles inventory can profit from EOQ. It reduces waste and overordering, reduces storage costs, and makes the most of vendor quantity discounts.

 

Advantages

• Reduces the expense of holding and storing
• Aids in keeping stock levels in line with consumer demand
• It gives precise figures on the amount of inventory that should be kept. 

 

Inventory for a day of sales (DSI)

One tool for tracking inventory and sales is the day sales in inventory or DSI. Because it determines how long it takes a company to sell its inventory and considers how long the current inventory will last, the DSI is also known as the average age of inventory.

 

Advantages

• Cut expenses from excessive inventory purchases
• Handle cash flow well
• Avoid wasting money on out-of-date inventory.
• Aids in obtaining the statistical information needed for a business’s sales, tracking, and inventory management
• Best  for managing inventories

 

Conclusion

There are numerous benefits of using an inventory management module; businesses can automate tasks, optimise inventory levels, and increase overall efficiency. Certain factors need to be taken into account when choosing inventory management software. For instance, sophisticated features like demand forecasting, analytics, and ongoing monitoring support companies in making better decisions, cutting costs, and raising customer satisfaction. Features, usability, customisation, scalability, integration, customisation, and support to ensure it meets your needs and yields the intended outcomes. Cherry Berry ERP offers cutting-edge, excellent inventory management software to increase efficiency in inventory monitoring and provide optimal customer satisfaction. They provide real-time, software-driven solutions to your significant needs