Performance Task Topic: Importance of Inventory Control in Business Done By: Mohamed Ayman and Mohamed Hashim Teacher: Rabia Salem School: Alitqan American Private School Grade: 12b1 Contents: Abstract……………….Pg.3 Introduction……………Pg.4-5 Literature Review…………….Pg.6 Research findings……………Pg.7 Conclusion……………………Pg.8 Reference……………………….Pg.9 Abstract In this presentation me and my partner we will be talking about the importance of inventory control in business where we will be stating and showing studies and facts from well known sources and websites and we will show graphs and studies that will support our claim and we will also answer important questions about the inventory control and what leads it to being poor and we will add some articles and state the pros and cons of the main topic and the solution to fix or properly adjust the inventory control in your business Introductory video https://youtu.be/iUqq_CfeXeg Introduction The topic is related to UNESCO goal no.12 In my performance task introduction, I am going to talk about the importance of inventory control.where me and my partner will get facts and well known information from guaranteed websites and researches and provide it to you without any doubt. So first of all there are some questions that should be answered first to continue the whole topic. 1)What is Inventory control? Inventory control is also known as stock control it refers as controlling all the stocks available in a company and the purchasing and receiving shipping tracking and many more examples. 2) What are the factors that lead to poor inventory control system? So basically there are many variables that affects and lead to poor inventory control system but the ones that have a huge potential on it is poor tracking , Limited access to inventory control, Bad management, Production capacity 3) What is the threats business will face if inventory management does not work properly? As I mentioned there are a lot of variables that affects or places a threat if the inventory management does not work properly and they are higher costs, conflict between the vendor and customer, employees will become less productive, indecisive decision making Literature Review Article one was published and done by Santosh Kumar Yadav2 This theory is concerned with the expansion of an intellectual inventory management system. The mean of the system is to link the extensive gap between the theory and the practice of inventory management and to assist industrial inventory managers to achieve an efficient and successful inventory management. The planned system attempts to accomplish this by providing regular pattern recognition and model assortment facilities. In order to integrate the system into the established computer-based intellectual inventory management structure and make easy the function of the pattern identifier, a data administrator has been developed to influence the history data necessary for arithmetical analysis and to load the data keen on the system from other applications. In order to establish the system's model base, the swot up of the modelling of inventory and the type and growth of professional systems are reviewed. The published models which deals with similar inventory trouble have been compared based on its applicability, simplicity, and being fit to be computerised. It was necessary to further enlargement and modifies published models to fill up the gaps in the model base. The overall arrangement and prominent features of the proposed system and the development of the system using ocular essential have been described. The system has been tested using actual life data supplied by the cooperating companies. At last, achievements and shortcomings of the system are discussed and some suggestions for additional study are outlined. http://www.ijstm.com/images/short_pdf/1454563174_284.pdf Research Finding State the cons and pros of inventory control and management techniques What Are the inventory control and management techniques? Better Inventory Accuracy: With solid inventory management, you know what’s in stock and order only the amount of inventory you need to meet demand. Reduced Risk of Overselling: Inventory management helps track what’s in stock and what’s on backorder, so you don’t oversell products.Cost Savings: Stock costs money until it sells. Carrying costs include storage handling and transportation fees, insurance and employee salaries. Inventory is also at risk of theft, loss from natural disasters or obsolescence. Avoiding Stockouts and Excess Stock: Better planning and management helps a business minimize the number of days, if any, that an item is out of stock and avoid carrying too much inventory. Learn more about solving for stockouts in our “Essential Guide to Inventory Control.” Greater Insights: With inventory tracking and stock control, you can also easily spot sales trends or track recalled products or expiry dates. Better Terms With Vendors and Suppliers: Inventory management also provides insights about which products sell and in what volume. Use that knowledge as leverage to negotiate better prices and terms with suppliers. More Productivity: Good inventory management solutions save time that could be spent on other activities.Increased Profits: A better understanding of both availability and demand leads to higher inventory turnover, which leads to greater profits.A More Organized Warehouse: An efficient warehouse with items organized based on demand, which items are often sold together and other factors reduces labor costs and speeds order fulfillment. Better Customer Experience: Customers that receive what they order on time are more loyal. What Are the Disadvantages of inventory control and management techniques? The disadvantages of inventory management systems are the same as for other software. Solutions can be expensive, hard to learn and subject to hacks. However, simple safeguards can mitigate weaknesses: Expensive for Small Businesses: The cost of inventory management software can seem daunting to a small business, but the investment often pays for itself in increased profits and improved customer loyalty. Additionally, cloud-based systems have made software that was once the domain of large enterprises available to smaller businesses.Complex to Learn: Business software is sometimes tricky to learn. However, managers can help by investing in online training to quickly bring users up to speed.Risk of System Crashes: Software does crash. However, you can remove the risk of data and productivity loss by using cloud-based platforms. Malicious Hacks: Malicious hacks are a risk to all businesses. The Internet of Things (IoT) adds even more complexity. Cloud-based software typically has greater security than a single company would offer on its own because of the risk a breach would have on the vendor.Reduced Physical Audits: When you automate some warehouse operations, it’s easy to skip a physical inventory check. Solve this by instituting regular audits. Outsourcing inventory control THE BENEFITS OF OUTSOURCING INVENTORY MANAGEMENT SO BASCIALLY THERE ARE FIVE POINTS YOU NEED TO KNOW 1. Storage and Warehousing Outsourcing your storage and warehousing can keep your costs down in many ways. That’s because warehousing costs go beyond square footage. They include pallet racks, forklifts, warehouse employees and facility management costs. Using a third-party logistics company (3PL) for warehousing also allows you to easily scale your business so you won’t, for example, need a bigger warehouse for your growing number of SKUs or overpay for storage when you have less. 2. Faster Order Fulfillment While it may seem convenient to ship your products in-house, it might not benefit your customers. A dedicated 3PL can usually deliver your products to your customers faster—and with lower shipping costs—because of their established relationships with carriers. A 3PL with multiple warehouses can also optimize distribution by shipping from locations closest to your customers. 3. Advanced Inventory Management Software An advanced and up-to-date warehouse management system is key to your inventory management, but a WMS is expensive to purchase and maintain. By outsourcing your inventory management, you won’t need to worry about a WMS, or adding new features as your retail business changes. A 3PL’s robust WMS can also reduce product shipping errors, trace ordered items within the warehouse and help you fulfill orders faster. 4. Inventory Levels Outsourcing your inventory management will help you reduce waste and money tied up in old inventory. Your 3PL will have an inventory control management team to ensure the right products are available at the right times to meet your customer demands during promotional spikes and seasonal volume increas es. You’ll also be able to easily keep in step with current inventory stock levels to better manage and control your overhead costs and accurately project future demand. 5. Costs and Savings Outsourcing your inventory management can also reduce costs in many areas, such as: Warehouse costs Logistics and carrying costs Management administration costs Unused inventory costs Purchasing costs This will help reduce management distractions and minimize inventory costs so you can focus on growing business. Real life example Drop shipping A drop ship company is a wholesale organization, or sometimes a manufacturer. They can handle the entire inventory management process for you. Once you make a sale, the drop ship company takes over. They will source the item from their warehouse, package it and deliver it. You will never actually see or touch the item yourself. This means all you have to do is market and sell the products to your customer. Drop shipping became increasingly popular as auction sites such as eBay grew in popularity. Today it's used in many different market sectors. Usually the retailer is paid a sales commission by the drop ship company. That's instead of the retailer paying for the drop shipping service. Some drop ship companies will even customize packaging materials. They will add your compliment slips and return addresses, for example. This means your customers will never know that their purchases didn't come directly from you. Conclusion So basically in my opinion I think that everything in the world has its advantages and disadvantages but when you accepts things and risks in your life you need to accept it as it is with its disadvantages too. In conclusion, I would recommend some steps and techniques on how to choose the perfect inventory management Selecting the best inventory management software requires a few basic steps: Define your inventory management problems. Understand who will use the software and consider any integrations, such as Electronic Data Interchange (EDI). For help understanding your particular software needs, see “Choosing the Right Inventory Management System.” Look for software with three essential features: automated replenishment, cycle counting and traceability. In today’s landscape, inventory planners need near- and real-time data collecting, reporting and analytics. In choosing a system, it’s helpful to review case studies of other businesses’ inventory experiences. References https://www.netsuite.com/portal/resource/articles/inventory-management/inventorymanagement-benefits.shtml http://www.ijstm.com/images/short_pdf/1454563174_284.pdf https://www.ukessays.com/essays/management/approaches-to-inventory-management-andre-ordering.php
