Inventory
Management
By Vaidurya D.J.
MBA ‘B’sec
1NZ19MBA77
Content
1. Introduction
2. Scope
3. Types of Inventory
4. Historical Background
5. Review of literature
6. Current Trends
7. Analysis
8. Conclusion
9. Bibliography
What is Inventory Management ?
• Inventory management is definitely important for a business to be successful.
It is administration of stock, inventory & non-capitalized assets. It helps in
managing the inflow & outflow of goods from suppliers to warehouse & from
warehouse to point of sale.
• Inventory mainly composes of raw materials, goods, finished products &
effective management of these are essential to ensure optimal stock level &
to maximize the earning potential of the company. Inventory is an investment
which is linked until either the item is sold, or it is used for production of
another item that will be sold. Businesses are dependent on having items in
stock, otherwise the customers go to competitors who can provide what they
need.
Scope of Inventory Management
1. Formulating policies
2. Organization Structure
3. Determination of EOQ
4. Safety Stock
5. Determination of lead time
6. Minimum Storage and Material Handling Cost
Types of Inventory
• Raw material
• Work-in-Progress
• Finished goods
• Safety stock
• MRO stock (maintenance, repair and operating)
Input > Process > Output
Historical Background
Historical background
Buying & selling things are happening from centuries so definitely it means that inventory
management has also existed in some way or the other. Surely there were no computers 300 years
ago & no barcode readers as well but people have always tried to simplify the traditional process &
adopted the available new technologies all along the way.
The Early Days
We are here talking about the period before industry revolution, when merchants had to note down
purchases & keep an eye on the items that was sold in that particular day & how many of the items
for sale left with them. Yes certainly they never had sales forecasting app so much it’s hard to
forecast future needs by themselves, which was not always accurate which could easily slow down
the business & cause troubles.
Modern Period
In the late 1940 & early 1954 Anna of the modern Barcode system was created & it used ultraviolet
light sensitive ink & a reader. The universal product code was created in late 1960 which improve
the inventory management system. In the mid & late 99 piece as the Computer technology
improved as well as the systems the modern inventory management system begin to be used. Now
this is one of the amazing technologies used in today’s inventory management. Now with mobile
inventory app managing your inventory in the 21st century has been easier.
Literature Review
The businesses tries to strike a balance in inventory between what is needed & what is
demanded by considering the major factor of reduction /cost cutting. This process of control is
called Inventory management. Inventory is basically assets (goods & materials) which are
stocked by any business. Inventory management focus on the capacity of the inventory, this
place is located so that one can use it when needed. Inventory management helps in the
demand forecasting, asset management of the raw materials, goods, forecast, pricing of goods,
to forecast the demand for the future. This helps the top level manger to understand &
coordinate with the supply chain management or production management, & quality
management.
Recent Trends
1. Data Analytics
2. Order Management System
3. Pick –to-light ,Put-to-light and Voice tasking
4. Cloud Services and Internet of Things (IoT) and Machine-toMachine Technology
5. Real-Time Inventory data
Analysis
1. ABC Analysis
2. FSN Analysis
3. VED Analysis
4. HML Analysis
5. SDE Analysis
The other techniques are:
1. Theories of Total Quality Management
2. Drop shipping
3. Bulk shipments
4. Backordering Just in time
5. Cross Docking
6. Back Ordering
7. Maintaining perpetual inventory system
Conclusion
• Inventory management is keeping accurate records of goods that are ready
for Packing. Inventory management is important for keeping the costs down,
while meeting the required regulations. Supply and demand should be
balance, and inventory management hopes to ensure that the balance is
unchanged.
• Inventory is an untouched/unused stock in the goods that contain an
important economic value and is held by the organization in various forms
such as awaiting pack, transformation, processing for use or sale in any future
point of time.
• Inventory is dynamic in nature. It requires a constant and careful evaluation of
the factors such as external and internal through review and planning. Most
companies have separate department called as inventory planners who
continuously monitors controls and reviews the inventory flow which interfaces
with the production.
Bibliography
• https://www.google.co.in/
• https://www.slideshare.net
Thank You