Let’s start with the description of inventory. Inventory may differ according its different forms. If the business is involved in manufacturing, then it needs Raw material to be procured. For such an organization raw material is also an inventory which is needed to be managed. Secondly, when raw material is processed and transformed into the finished goods, then finished goods also become inventory.
However, in the retail industry, the inventory is comprised only of finished goods as such organizations, purchase the read made goods and sell them at a profit margin.
The inventory needs to be managed duly. Because if inventory is not managed properly, then the business cycle cannot run smoothly and poor inventory management may become a hindrance in the in the proper functioning of the organization.
Inventory management activity needs to be seen from two perspectives. Firstly the inventory received from the supplier is supposed to be managed and secondly, the goods that are supposed to be transferred to the customers. So, at both sides inventory check is required to be imposed in order to keep the organization away from any bitter consequences.
Inventory management activity can also be regarded as the maintenance of the supply chain. Inventory can be managed by adopting many procedures and precautionary measures. Every preliminary activity should be adopted, in order to manage the inventory in the better way.
The main thing about the Inventory Management is to save the inventory from the natural disasters like fire, demolition by earthquakes, floods etc. precautionary measures are needed to be taken so that the loss of inventory due to the natural disasters can be mitigated. for example Fire Extinguishers should be in place in case the inventory catches fire. The staff should not be allowed to smoke in the area where the inventory is present.
Inventory management should be done from both sides i. e from supplier perspective and Customer perspective. If one side is disturbed, then the other side would automatically be disturbed and the ultimate effect would be the bad reputation of the business and the poor functioning of the organization.
Lets start from the supplier side inventory management. Organization needs to keep good relationship with the supplier so that there may not be any issue of the inventory supply. One technique that can be adopted is Backward Integration. In backward Integration, the organization may buy the supplier. In such a way the organization will take care of its supplies by itself and there would not be any issue about the supply of inventory. However the organization needs to scrutinize if it is able to carry on this activity in financial and non-financial perspectives.
The organization can also think of Forward integration. In this activity the organization would buy the supply medium though which the customers receive the goods in this way the customers will not suffer from the improper /late supply of the goods. This will also lead to good Inventory management.Inventory business management helps us to increase the business over the word.Through the use of inventory business management in marketing we increase the business area.
Organization may brief its internal audit department to keep good control over inventory and regular stock count to have good Inventory management.
The Inventory levels should also be kept up to the appropriate levels for both raw material and the finished goods. In this way the production process will not be affected and on the other hand the customers will not suffer. These Inventory management techniques can be adopted in order to have good inventory management.