• What is Inventory Management?

Managing and controlling the ordering, loading and use of the equipment or machinery that a company has to use when it is producing its items is called inventory management.  It also includes supervising the amount of finished products for sale.  

Inventory management is a very important skill in any business as it keeps track of the production and sale of all the company’s supplies. If there is a mistake in the inventory management, it can cause many financial problems for a business.

• Common Inventory Management mistakes and their solution:

1. Incorrect guess of Inventory:

Many companies do not know how much product they should be manufacturing according to the demands of their client. As a result of their inaccurate inventory management, these companies end up producing more or less of the required amount and their company has to face loss.

Solution:

To remove this error, Inventory managers should keep track of all the production and sale cycles on a daily basis. It is important that the managers do extra effort to both track and work to improve the company’s sale and production rates. You can use charts and diagrams to show the estimated amount of products the company needs to manufacture in a given time and then compare it with the amount the company is internally building.

       2. Unqualified Inventory management staff:

Many companies have a good production and cost scale but unfortunately, their staff and workers are not very familiar with inventory management skills. When a firm’s managers, office workers and other staffs make inventory management decisions without any specific inventory management training, then it is clear that the company will have wasteful inventory all through its system.

Solution:

If a company wants its business to succeed, it is very important that the company should hire professional and skilled Inventory management staff to keep check and balance over its products and sale. Hiring a number of expert people and assigning them the job of keeping in check the company’s sale and production is as important as hiring a professional technical and mechanical staff.

     3. Less internal communication:

When a company is achieving for good profitable goals, it needs all functions to support planned inventory management targets. Managers in every field are required to gather up-to-date information for forecast administration and inventory scheduling. If, however, the organization’s employees do not communicate directly and have no bond to discuss their inventory management strategies, the company will likely face a downfall. Basic internal communication between an organisation’s staff is very important.

Solution:

The organization should arrange for its inventory staff to have regular monthly meetings with a goal of reaching a planned scale both on the demand side (sales section) and the supply side (production section).

These are some common mistakes that many companies who are good at manufacturing their products overlook. If a company has skilled professional staff and keeps daily check of its inventory management records, it will get rid of the losses that it might face.