Inventory management is the process of using inventory control to keep the inventory of a business in good order and ready for use, according to the specific needs of that business. A small business inventory can include not only the finished products that the business sells, but also the raw materials necessary for their manufacture.
The Key to Avoiding Stock Problems
Regardless of the small business inventory size and the diversity of the items it includes, inventory control and management is one of the key aspects of running a small business. Business owners and managers who follow a clear and effective inventory control process are able to effortlessly manage their small business inventory to make production as well as the selling and shipment processes more effective. If a small business inventory isn’t adequate, the business can suffer, and in critical cases, even come to a sudden and dangerous halt.
Maintaining an Optimal Balance
When it comes to inventory control, excessive investment as well as insufficient investment must be avoided. Excessive investment not only uses up more money, but it often creates situations in which a small business inventory occupies too much space. This increases the storage costs, as well as the likelihood that the inventory may get damaged or lost. Insufficient investment, on the other hand, leads to production lag, situations in which the production fails to meet the demand, and constant stock problems.
Direct benefits of an efficient inventory control system include lower inventory management costs, smoother production and sales due to an adequate inventory, and the elimination of stock-out problems. Furthermore, proper inventory control helps minimize small business inventory damage, loss, and misuse.
