Material management helps the project manager to manage material. Were as Inventory management is a systematic approach to sourcing, storing, and selling inventory—both raw materials (components) and finished goods (products).
In business terms, inventory management means the right stock, at the right levels, in the right place, at the right time, and at the right cost as well as price.As a part of your supply chain, inventory management includes aspects such as controlling and overseeing purchases — from suppliers as well as customers — maintaining the storage of stock, controlling the amount of product for sale, and order fulfillment.
Naturally, your company’s precise inventory management meaning will vary based on the types of products you sell and the channels you sell them through. But as long as those basic ingredients are present, you’ll have a solid foundation to build upon. In these way there is ABC analysis, ved analysis are present inventory techniques.
Inventory Management
ADAM HAYESsays about
What Is Inventory Management?
Inventory management refers to the process of ordering, storing and using a company's inventory. This includes the management of raw materials, components and finished products, as well as warehousing and processing such items.
For companies with complex supply chains and manufacturing processes, balancing the risks of inventory gluts and shortages is especially difficult. To achieve these balances, firms have developed two major methods for inventory management: just-in-time (JIT) and materials requirement planning (MRP).
Some firms like financial services firms do not have physical inventory and so must rely on service process management.
Inventory Management
How Inventory Management Works
A company's inventory is one of its most valuable assets. In retail, manufacturing, food service and other inventory-intensive sectors, a company's inputs and finished products are the core of its business. A shortage of inventory when and where it's needed can be extremely detrimental.
At the same time, inventory can be thought of as a liability (if not in an accounting sense). A large inventory carries the risk of spoilage, theft, damage or shifts in demand. Inventory must be insured, and if it is not sold in time it may have to be disposed of at clearance prices—or simply destroyed.
For these reasons, inventory management is important for businesses of any size. Knowing when to restock inventory, what amounts to purchase or produce, what price to pay—as well as when to sell and at what price—can easily become complex decisions. Small businesses will often keep track of stock manually and determine the reorder points and quantities using Excel formulas. Larger businesses will use specialized enterprise resource planning (ERP) software. The largest corporations use highly customized software as a service (SaaS) applications.
