Inventory management is key to maintaining a profitable, organized, and productive business. For some companies, practicing inventory management is simple: they take inventory every week or so by walking through a storage closet and checking to see if they’re low on anything. But other companies must take inventory management quite seriously, tracking every item the minute it arrives, moves, or is used up.
In this article, we’ll cover the definition of inventory management, the purposes of inventory management, and a few ways the right inventory system can help you manage your business’s inventory.
What is the definition of inventory management?
Inventory management refers to the ordering, stocking, storing, and utilizing of inventory. All businesses practice some form of inventory management, whether it’s keeping track of finished products sold in stores, or tracking the equipment and supplies they use to create a product or service. Many businesses turn to inventory management software to help them get a handle on inventory quickly and efficiently.
Related: What is Inventory Management?
What is the main purpose of inventory management?
The main purpose of inventory management is to help businesses easily and efficiently manage the ordering, stocking, storing, and using of inventory. By effectively managing your inventory, you’ll always know what items are in stock, how many of them there are, and where they are located.
Plus, practicing strong inventory management allows you to understand how you use your inventory–and how demand changes for it–over time. You can zero in on exactly what you need, what’s not so important, and what’s just a waste of money. That’s using inventory management to practice inventory control. By the way, inventory control is the balancing act of always having enough stock to meet demand, while spending as little as possible on ordering and carrying inventory.
Experience the simplest inventory management software.
Inventory management for physical and perpetual inventory
If you count your inventory manually every time you need to find out what’s in stock, you take physical inventory. If you’re constantly updating what you’ve got on hand and where it is, you take perpetual inventory.
Perpetual inventory is practically impossible to track manually. There are just too many moving parts! You’ll almost certainly require technology, like an inventory app, to keep your records up to date. Key automation features, like QR code scanning, can make keeping your inventory app synced fast and simple.
If you take physical inventory, you can decide between using pen and paper, an inventory spreadsheet, or inventory management software. Just know that manual tracking tends to take a lot of time, and can lend itself to human error.
What to look for in inventory management software
The right inventory management software offers end-to-end inventory management, including an at-a-glance look at everything you’ve got, the ability to scan barcodes and QR codes, super-customizable item details, and in-depth reporting.
Your inventory management software should also allow you to create QR codes and barcodes for unlabeled stock, and enable other team members or employees to access the inventory, too.
These days, inventory management software tends to work more like an app. You can download these apps on your phone or tablet, or use a desktop version. That’s great news for anybody who’s not at a desk while taking inventory, or for businesses who stock inventory across multiple locations.
Sortly is a top-rated inventory app with both free and low-cost monthly plans. You can try the advanced or premium product for free for two weeks, too. Start your two-week free trial of Sortly today.