Inventory Management is keeping track of stock levels to ensure that products are available to meet customer demand without overstocking. Key aspects include:
- Stock Monitoring: Continuously tracking inventory levels using software systems to maintain real-time data.
- Demand Forecasting: Predicting future customer demand using historical data, market trends, and sales patterns.
- Reorder Point Calculation: Determining the optimal time to reorder stock to avoid shortages and excess inventory.
- Safety Stock: Maintaining a buffer stock to protect against uncertainties in demand and supply chain disruptions.
- Stock Rotation: Implementing methods like FIFO (First-In, First-Out) to minimize waste and manage product shelf life.
- Inventory Audits: Regularly counting and verifying physical stock to ensure accuracy and reduce discrepancies.
- Supplier Coordination: Working closely with suppliers to ensure timely replenishment and negotiate favorable terms.
- Inventory Turnover Rate: Analyzing the rate at which inventory is sold and replaced to optimize stock levels.
Effective inventory management minimizes carrying costs, reduces stockouts, enhances cash flow, and improves overall operational efficiency.
