Inventory control involves managing inventory from raw materials to finished goods, with good controls keeping costs down and satisfying customers. Inventory control software streamlines the process, but local personnel are still needed for manual checks and troubleshooting. Ordering inventory and managing available inventory through techniques such as inventory rotation are also part of inventory control. Accurate inventory control requires knowing what is actually available, which can be achieved through periodic manual inventory counts.
Inventory control is the management of inventory at various stages of the production process, from raw materials to finished goods. Good controls will keep costs down while satisfying customers, while poor controls can lead to cost overruns and customer complaints. Many companies use inventory control software to streamline the process and make it more efficient. Local personnel are still needed to manually check inventory counts, perform inspections and troubleshoot issues as they arise.
One aspect of inventory control involves ordering inventory. For manufacturers, this includes a variety of raw materials, while wholesalers and retailers need to order finished products. The goal is to keep enough stock available to fulfill orders, without excess. Material storage is expensive and can become very expensive when large volumes of material are stored. There is also a risk that the shares will expire or become obsolete before they can be moved if the company asks for too much.
Managing available inventory through techniques such as inventory rotation is also part of inventory control. Companies often use the oldest items first to keep all inventory as fresh as possible. The company may need to provide climate control and other measures to protect the stock until it leaves the site, and this is part of the control system. For companies dealing with living organisms, caring for animals will also include providing food and water and health checks. Other materials, such as hazardous chemicals or ammunition, may need to be shielded for security reasons.
As inventory leaves, inventory control systems track it and compile information that can be useful later. Companies can quickly determine which items move the fastest and will use this information to decide how much to order in the future. This information is also fed by sales reports and forecasts, as the movement of inventory provides important information about what the company sells. It can also be useful for recording taxes and other financial statements when inventory on hand must be reported along with other assets and liabilities.
Accurate inventory control requires knowing what is actually available. In addition to electronically tracking inventory, companies can also perform periodic manual inventory counts to physically locate everything in stock and ensure that the actual numbers match those recorded on a computer. If not, investigation is needed to determine why not. Stock may have been misplaced, lost, stolen, or misrecorded. Frequent inconsistencies are a sign of poor inventory control and indicate a need to protect the facility or better train workers.
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