Key Functions for Effective Inventory Management

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Key Functions for Effective Inventory Management

Inventory management is essential to every business. An up-to-date inventory information helps to increase productivity, improve customer satisfaction and capture more revenue in the long term. Therefore it is highly recommended that your business obtains an effective Inventory Management Software at place. A well-functioning stock management system helps us to keep stock under control and track its route throughout the transactional operations. Ensuring the right stock is at the right place, at the right time is critical to manage supply chain volatility. Stock control system can streamline operations by consolidating all informations and giving access to the current and reliable inventory data on hand. Let us consider now the functions that an organization need in managing inventory efficiently. Some of the most valueable key functions of Inventory Management are:

 

Barcoding and Scanning Technology

Barcoding is the most common form of automatic identification for capturing product information, to reduce errors and eliminate costs with the help of scanning technology. It makes inventory control faster and more accurate. Bar codes tracks virtually everything from retail goods to medical records. Businesses that sell physical products need a universal product code (UPC) and a barcode for every unique item that they deal with. These are essential as they help to identify products and convey information about them to distributors and retailers. An UPC barcode can be scanned to provide product information to the reseller or even to departments within an organization. Barcode software is installed on a computer and a scanning device is able to gather data from the bars specially designed in the series of vertical lines and number formats that represents an unique code for each inventory management.

Thinking of how to get the barcodes. The first step is to get a prefix for your company from an approved GS1 Company or an authorized reseller. This is an unique identification number licensed to your organization. It will form part of every barcode and identification number that you create for your individual products. There is a 12-digit number in a UPC barcode called GTIN (Global Trade Item Number). The initial digits are reserved for your company prefix and this is followed by the item reference numbers.

 

Lot and Shelf Life Control

Lot or Batch number help companies control their defects in manufactuing and deliver right product at the right time. Most of the industries rely on lot control to maintain their inventory, the most common of them are food and medical industries. Managing your inventory is important, but managing your inventory when you have perishable items is crucial. Inventory lot control can protect your stock from expiring before your customers receive it. You can assigns a lot or batch number to a group of items that have the same production or expiration date. The lot number helps the system track the expiration date, weight and remaining shelf life of the grouped items. Tracking your products in terms of these lot numbers makes it simple to verify that you are sending out the right stock at the right time. Using this function gives your company full control over your lots or batches.

Grouping your products with batch numbers can help you identify which items were used to assemble a finished product. For example, your company produces cellphones and you find out that the battery is defective. It will be easier to identify the defective batteries if you know which batch it came from. This will help mitigate the risk associated with selling faulty products and reducing the number of items you will need to recall.

 

Serialized Inventory Management and Control

Product serialization inventory is crucial for most of the businesses. When products are serialized, each item is assigned its own unique number that can differentiate it from the rest of your inventory. Items that use serial numbers are typically more expensive products, such as jewelry, automobiles, electronics and appliances. Using serial numbers helps track warranties, trace items, and confirm ownership.

Let us take example of pharmaceutical manufacturers, they are investing in ways to uniquely mass serialize drugs and serialize each unit and to register the parent child relationships of units into larger containers, cases or cartons. The information required here in a serialization program is strongly dependant on the many different national laws and standards. There are cases of adulterated drugs, therefore in an effort to combat the risk of counterfeit and adulterated drugs, national regulators have pursued the need for product serialization.

Serial Numbers are also used for process improvements. Process improvement is the practice of continuously advancing the production of your products. Serial numbers can improve your processes by allowing your company to find defective products or products in need of repair. Once a faulty product is found, you can determine the cause of the defect and make the appropriate process changes to prevent defects from reoccurring. Process improvements tie into enhancing your organization’s quality control and the need to maintain the quality of your product to meet your customers’ expectations.

 

Kit Stocking and Product Bundling

A kit is a collection of inventory items that are packaged together into a parent item and sold under a parent name. Kitting helps you accurately track your order fulfillment and assembly process, where separate but related components are combined as a set to make a single SKU or unit. For example, you might store several computer components together, such as a monitor, hard drive, keyboard, and mouse. When you sell the items, you sell them collectively as a computer system. In another example, you might store the same computer components in different locations within a warehouse. By entering the items as kit components, you can easily locate each item and assemble the final product.

You can set increase the number of selling options by setting up kits or bundles and creating a new product.  Some refers to this as product bundling, and the two terms are interchangeable.When the kit is ordered, inventory is automatically decremented from each product that makes up the kit. This makes it easy for businesses who assemble their own products to track inventory levels of both finished goods and individual parts. In addition to using kitting to create an assembly composed of individual parts, kitting may be used for promotion products that involve proving additional products. Creating promotions such as “Buy 2, Get 1 Free” is a straightforward operation with the kitting feature.

 

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Dev

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