Inventory management is an approach to sourcing, distributing, and selling merchandise or raw and finished goods. Inventory management means the right amount of products, at the right time, in the right store. Even if 2 stores are from the same retail chain, it doesn’t mean they should have the same amount of products or even the same products available.
Inventory management takes into account multiple factors, including the needs and wants of shoppers, the characteristics of the store, and best seller products.
Why is inventory management important?
Inventory management offers a clear overview of the products that are available, the ones that need to be ordered, and products that were not a real hit. It helps optimize fulfillment and reduce overall costs.
Of course, when a store is stocked with the right products, shoppers are satisfied and they will become loyal customers.
What are the methods of inventory management?
There are over 15 inventory management methods. Each retailer chooses the one that better suits their needs.
- Economic order quantity
- Minimum order quantity
- ABC analysis
- Just-in-time (JIT) inventory management
- Safety stock inventory
- FIFO and LIFO
- Reorder point formula
- Batch tracking
- Consignment inventory
- Perpetual inventory management
- Lean Manufacturing
- Six Sigma
- Lean Six Sigma
- Demand forecasting
- Bulk shipments