An Introduction to Inventory Management Systems

Inventory management systems help organizations track supplies used.

Inventory refers to the supply of materials required for the operation of a business. These supplies correspond to an investment in materials. The proper management of these supplies impacts the ability of a business to maximize profits.

Balanced Inventory

Inventory management systems track a wide variety of quantities of stock. Inventory is tracked regarding inventory in stock, items that should be ordered in higher quantities and adequate inventory turnover. Volume purchases are often used to ensure lower prices for frequently purchased items.

Purchasing Plan

Inventory management systems track when an order should be placed, when inventory is at peak volume, the receipt of deliveries of inventory and the anticipated date to order more stock. Analysis of the inventory system purchasing plan can provide information as to which items are not being used and should no longer be ordered.

Inventory Control

Different types of inventory control methods can be used to manage inventory. Businesses may use a ticker control system in which staff count a portion of the inventory on a regular basis to determine inventory levels. Alternately, a click-sheet control system uses a paper record-keeping system to keep track of inventory levels, while stub control is based on the retention of sales receipts to track inventory flow. Offline point-of-sale terminals send information directly from a computer to an inventory management system.

References

• U.S. Small Business Administration: Inventory Management

Resources

• Data Center Assistance Group: Inventory Management System