What are the functions of inventory management?
When it comes to running a business, its important to evaluate and manage your inventory regularly. But what is inventory management? Why is it important and what are the different methods? In this article, we'll be discussing these points in detail to help you understand inventory management in all its forms and why it's essential for any business
What is inventory management?
Inventory management refers to the process businesses undergo to store, order and distribute their products in an efficient way. This helps them to keep track of how much stock they currently own so they don't run out unexpectedly, as well as avoid using unnecessary amounts of storage. As such, an inventory management system is a series of processes that do whatever you need in order to help you manage your inventory
What are the different types of inventory management system?
There are many different forms of inventory management that you can use to maintain stock in your business. Here are a few of the most common:
Manual inventory management
As its name suggests, a manual inventory management system is maintained and controlled without using technology such as spreadsheets or software. For a small to medium-size business, a manual inventory management system could be nothing more than a piece of paper listing all of your stock, which you counted by hand and monitor regularly. At the end of the day, as long as your inventory management system allows you to track your stock quickly and effectively, it is perfectly valid. This system is ideal for a company that might have a lower budget and does not want to spend money on a software or app that
Periodic inventory management
Periodic inventory management is another example of a system which uses the physical counting of stock to its advantage. Essentially, with this method, inventory is only counted and updated at specific times rather than consistently. This system is ideal for a company that does not want to operate additional equipment or software, since all of the stock-counting can be done on paper, as well as companies who already have a good eye on their inventory and don't need to monitor it all the time.
Perpetual inventory management
A perpetual inventory management system is an example of a system which uses technology to its advantage. It automatically updates your business's inventory after each sale transaction through something called an automated point-of-sale system, or POS. A perpetual or ongoing management system helps to regularly update your records and help prevent your business from running out of stock, among other inventory problems you might face on a regular basis. This method would be ideal for a company that has a reliable team of staff who are able to perform regular and accurate record-keeping.
Barcode inventory management
Most commonly seen in larger businesses, barcode inventory management is a system used to assign a specific number to each product in the company's inventory for an extra layer of organisation. Barcodes can also be assigned to certain locations such as warehouses and stockrooms- this means that when a product is scanned, the inventory system will record not only the product number, but the location as well. This management system would be useful for companies that use a series of different locations for their stock and need a system that can track all of them
Which system is right for our business?
Since there are so many different methods of inventory management, it only makes sense for most businesses to choose one and stick to it for most of their processes, right? Not necessarily. We've given a few examples of businesses which might suit each management system, but there are plenty of ways to mix-and-match your inventory management process. For example, if you wanted to, you could use a combination of both perpetual and periodic management depending on the products that you sell. It all depends on which features and advantages you need the most!
How can we help?
Zigaflow's stock control module allows you to track serial numbers, batch numbers or expiration dates on products, and quickly allocate stock directly onto an individual sales order. Not only that, but it can also work hand-in-hand with Zigaflow's purchase orders tool and directly book stock in from an order.
For more information on Zigaflow's stock control module, book a demo with a member of our team today.