In order to understand firstly what is actually concept of inventory
management is that inventory management is the assets of any organization that
are considered to use in the production of any goods and services refers to
sales or any other consignment. There are different types of Inventory
management i.e. Raw material goods, pending work that are considered in work in
progress and the final or finished goods. The main key of successful inventory
management is to maintain the internal
control over inventory which includes any kind of damage or theft , tracking of
different purchase orders etc.
Inventory management is the essential part of the
process of complete procurement cycle. Managing the inventory is very important
to the success or smoothly operations of any organization. Inventory management
also helps organization in the matter of their cash flows. Inventory management
involves a process that helps to identify the inventory needs, it helps to set
the inventory targets and status of goods in their stocks. The companies who do
not have the efficient inventory management systems are leading them towards
excessive unnecessarily costs and expenditures which effects the customer
services level. Inventory management facilitates maintaining sufficient
inventory for untroubled sale and productions operations. It also helps about
the stock out problems which ultimately can effect the repute of the
organization and disturb the customer services level. It actually helps to
minimize the administrative workload and even over all operations cost. It also
helps to maintain a check and balance of loss of materials due to the
negligence and it also helps to identify duplication in the stock ordering.