Is There Really A Need For Automated Inventory Management? | Programming | Computers

In today’s economy, everybody is redirecting all their attention towards the bottom line. All companies expect the bottom line to rise miraculously despite the growing prices for goods and services. During the recessionary period, most of the companies scraped through by streamlining procurement through increased saving targets which were achieved with fewer resources. Now, many are looking at technology in order to improve efficiency and effectiveness. Software solutions have been developed that allow companies to source more efficiently, spend more strategically and build stronger relations with the suppliers. These softwares provide greater insight into the company’s spending patterns and uncover saving opportunities. In some companies, it has been found that efficient inventory management has the capability to save the organization a lot of money. This article is aimed to provide a better insight into inventory management and how it can enable savings.

Inventory management is the process of overseeing the flow of goods in and out of an existing inventory. It usually involves managing of the inventory stock in order to prevent the stored goods from becoming too high or dropping to dangerously low levels that could hinder the operation of the company for however brief a time. Capable inventory management is more than just efficient book keeping. It also involves the process of controlling the costs associated with the inventory, both from the total value of goods perspective and also the accompanying tax burden on cumulating value of the inventory.

Inventory management basically involves three key aspects:

• Understanding how long it will take the supplier to process an order and deliver it to the company
• Understanding how long it will take for the delivered material to be transferred out of the inventory and put into use
• Understanding when next to place and order and how many units it would take to keep the production running without a hitch.

And then there is the buffer. Calculating and monitoring the buffer stock also leads to effective inventory management. Buffer stock is the additional units over the minimum number required to maintain consistency in the production levels. This is more a precautionary measure that a company takes in order to brace itself for an emergency. For instance, if a machine goes into repair while assembling an important order, it would be good practise to keep some extra units of spare parts at handy so that the machine can be repaired and put back into production immediately.

Inventory management also has to deal with following the movement of the materials in the various stages of operation. Known as work in progress inventory, tracking materials as they are used in the production of finished goods allows the inventory manager to identify situations when there is a need to adjust the ordering amounts before the stock in the inventory gets unacceptably low or unacceptably high.

And then there is the book keeping. Knowing where and to whom each product was supplied to is very important to track the movement of the goods in the organisation. Keeping accurate information on the current stock status helps in quickly conveying to the top management or anyone who is in need of the goods what is available and ready for transfer at a given time.

Managing all these record-keeping manually leads to a lot of errors and is unnecessary paper work. if the management requires a current status of the inventory in the warehouse, the chances of obtaining an accurate number is slim. Through an automated process, the manager can update the stock based on the inflow and outflow of the goods easily. A good inventory management system can also let the management look at the history and make informed decisions at critical moments. It automatically keeps note of who the last unit was shipped to. It automatically increases or decreases the number of goods in the inventory when new orders come in or when the units are shipped out. It automatically alerts the manager when the inventory falls below the desired levels or increases more than the upper cut-off. It saves time, effort and a lot of paper.

 Enaviya provides Sharepoint Application Development, Application Development Companies and Offshore Software Development Company

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