What Is Inventory Management? Does Your Business Need it?

Inventory management is a critical part of any business. If you don’t have the right inventory, you can’t sell anything, and if you don’t know what inventory to buy, you can easily end up with too much or too little of something. This can be a huge problem for businesses.

In this blog post, we will discuss inventory management and whether or not your business needs it!

First, let’s start by defining what it is.

What Is Inventory Management?

Inventory management is the process of tracking inventory levels, orders, sales, and deliveries. It also includes forecasting future inventory needs, managing inventory risks, and ensuring that inventory is available when needed. It is critical for businesses because it ensures that the right inventory is available at the right time.

Without inventory control, businesses would have to guess how much inventory they need, which could lead to them either having too much inventory (which ties up capital, takes up space, or worse still gets bad) or too little inventory (which can lead to lost sales). This is what makes inventory control important.

To decide if your business needs inventory management, there are a few things to look out for. Let’s discuss this next.

Does Your Business Need Inventory Management?

There are a few things to consider when trying to determine if your business needs inventory control and management:

• Do you have inventory?
• Do you plan on selling inventory?
• Do you need to track inventory levels?
• Do you need to track inventory orders?
• Do you need to track inventory sales?
• Do you need to track inventory deliveries?
• Do you need to forecast inventory needs?
• Do you need to manage inventory risks?

Let’s expound on each of these questions.

Do you have inventory?

This one is pretty straightforward- if you don’t have physical inventory, then you may not need specialised inventory control services. This would apply if you were a service-based business with no inventory to sell. It could also be the case if you have a very limited inventory and sell it all in one go (think food truck inventory or inventory for a pop-up shop). For safety stock, or inventory that is kept on-hand in case of an emergency, or raw materials, businesses usually don’t need to track this inventory since it’s not being sold.

Do you plan on selling inventory?

If you have inventory but don’t plan on selling it, then you also don’t need inventory management. This would apply to things like inventory for a manufacturing business (that doesn’t sell the products it makes) or inventory for a business that uses it to provide a service (like inventory for a construction company).

Do you need to track inventory levels?

If you need to track inventory levels, then you probably need inventory management. This would apply to businesses that have inventory that fluctuates (like a clothing store that has to keep track of inventory levels for seasonal items) or businesses with inventory that is perishable (like a grocery store).

If you have a smaller amount of inventory, using a periodic inventory system may be the best bet for you. This involves updating records by physically counting each item. On the other hand, a perpetual inventory system is more as it automatically updates inventory immediately after the levels change. However, you will need a dedicated inventory management software or system to get the most optimal results for your business.

Do you need to track inventory orders?

If you need to track inventory orders, then you probably need inventory management. This would apply to businesses that sell inventory (like a retailer) or businesses that use inventory to provide a service (like a construction company).

Do you need to track inventory sales?

If you need to track inventory sales, then you probably need inventory management. This refers to a system that helps businesses keep track of inventory levels, sales, and purchases. It can also help with forecasting inventory needs. This would apply to businesses that sell inventory (like a retailer) or businesses that use inventory to provide a service (like a construction company).

Do you need to track inventory deliveries?

If you need to track inventory deliveries, then you probably need inventory Control and management. This would apply to businesses that have inventory that needs to be monitored, such as grocery stores or clothing boutiques.

Do you need to forecast inventory needs?

If you need to forecast inventory needs, then you probably need inventory control. This would apply to any business that sells products, including parts and inventory for machines. The reason for this is that inventory control is necessary to avoid stockouts, especially in these business models.

Do you need to manage inventory risks?

If you need to manage inventory risks, then you probably need inventory management. This would apply to businesses with inventory that is perishable or has a limited shelf life. It would also apply to businesses that sell inventory since there is always the risk of inventory becoming damaged or lost.

If you answered yes to any of the above questions, inventory control and management is likely something your business needs. But if you’re still not convinced, here are some reasons why you should consider it:

Benefits of Inventory Management

There are a number of benefits that come with inventory control and management. Here are a few to get you started.

Save money

One of the main benefits of inventory control is that it can help businesses keep inventory costs low. This is because inventory management software can help businesses keep track of inventory levels and ensure that they only order what is needed.

Reduce waste

Another benefit of inventory control and management is that it can help businesses reduce waste. A good inventory management system can help businesses keep track of inventory levels and ensure that they only order what is needed. This is great for effective supply chain management as it can help businesses Monitor stock levels and avoid over-ordering inventory.

Improve customer service

Another benefit of inventory control is that it can help businesses improve customer service. This is because inventory management systems can help businesses keep track of inventory levels and ensure that they only order what is needed. This can help businesses avoid stockouts, which can lead to customers being unhappy.

Conclusion

Proper inventory management can help businesses keep track of inventory levels, sales, and purchases more effectively. This means that tasks like demand forecasting will be easier for businesses to perform. It can also help with forecasting inventory needs. Inventory management is necessary for businesses that sell inventory or use inventory to provide a service.

As we have seen in the post, there are a number of benefits that come with inventory control, including saving money, reducing waste, and improving customer service. If you are a business owner, inventory management is something you should consider.

At Brand Services, we offer inventory services that help businesses with diverse needs. Contact us today to learn more about our services and how we can help your business.