Introducing Inventory Management

Name: Introducing Inventory Management
Author: Sergio Lopez

Learn how inventory is managed through the inventory-management process.

Preview the first lesson free — get full access to all 5 lessons.

Course: On-Demand

(upbeat music) Successful inventory management can reduce costs, increase productivity, and ensure customer satisfaction for any business. The following lessons will define inventory management and inventory control, explore different systems of inventory management, and review best practices for establishing an inventory policy. Inventory management encompasses the processes of ordering, storing, and using a company's inventory. This includes managing raw materials, components, WIP, and finished goods. An organization's inventory can be one of the most expensive assets it has. The accurate management of this inventory is vital to the health of the organization. Management must understand how much of each skew is available for consumption and sales. If the inventory level is low, the purchasing department needs to know how much more to buy. Manufacturing needs to know how many raw materials or components are available to schedule production, and the sales department needs to know how many finished goods are available for customers. Tracking and managing inventory is essential to the entire organization. There are three levels of inventory management, which build on one another, like a pyramid. The bottom level is inventory control. This is the systematic and physical tracking of the organization's inventory. The control of inventory can be facilitated by using technologies such as radio or desktop scanners. Think of this technology like a cashier scanning your purchases in the checkout line. Not only is the system tracking your purchase, but the inventory control system is also deducting the items purchased from the store inventory. The process of cycle counting is also important in keeping an accurate record of your inventory. Cycle counting is done by scanning all the items in the store or warehouse location to compare with what the system says is in the location. If the counter scans more or less than what the system quantity has on record, the system should be updated to the new quantity. The middle stage of the inventory management pyramid is inventory planning. In this stage, the organization takes the inventory quantity information and makes planning decisions. Does it have enough inventory to take care of the customer demand? Does it need to buy more or make more? Has it been consistently running out of needed inventory? All of these are part of the inventory planning process. The top stage of the pyramid is strategic inventory optimization. This is a level of inventory management that many organizations strive to achieve. At this stage the organization can achieve inventory management maximization. The results are improved forecast accuracy, reduced inventories and better cash usage.

Beginner Provider : Sergio Lopez 5 Lessons · 12m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

A company’s inventory assets must be both tracked and managed. In these lessons, we’ll explore these basic inventory-management concepts.

You’ll also learn how inventory control, cycle counting, and inventory planning allow for strategic inventory optimization. We’ll also cover what enterprise resource planning (ERP) and a warehouse management system (WMS) are used for.

What You'll Learn

Define inventory management and explain its core concepts
Distinguish between inventory control and inventory management
Identify the benefits of using an inventory-management system
Explain what enterprise resource planning (ERP) and a warehouse management system (WMS) are used for
Apply best practices in inventory management
Recognize what barcodes and RFID tags are

Key Takeaways

A company's inventory assets must be both tracked and managed.
Inventory control and inventory management are distinct concepts with key differences.
Inventory control, cycle counting, and inventory planning enable strategic inventory optimization.
ERP and WMS are systems used to support inventory management.
Barcodes and RFID tags are tools used in inventory management.

Frequently Asked Questions

What does this course cover?

It explores basic inventory-management concepts, including the definition of inventory management, the differences between inventory control and inventory management, the benefits of an inventory-management system, what ERP and WMS are, best practices in inventory management, and what barcodes and RFID tags are.

What is the difference between inventory control and inventory management in this course?

The course teaches the differences between inventory control and inventory management as one of its learning objectives, covered in the lesson 'Inventory Control vs. Inventory Management.'

What systems will I learn about?

You will learn what enterprise resource planning (ERP) and a warehouse management system (WMS) are used for, as covered in the lesson 'Keeping Track with Inventory Management Systems.'

How is the course structured?

The course includes lessons on Defining Inventory Management, Inventory Control vs. Inventory Management, Keeping Track with Inventory Management Systems, Best Practices in Inventory Management, and a Test Your Knowledge assessment.