Types of Inventory Management Systems

Are you thinking of organizing your business and adding a pro aspect of electronic or online management into it? Do you find it difficult to manually manage the inflow and outflow of resources and physical components of the business into that old ragged diary of yours? Is your business suffering from problems such as dead stock, high taxes, storage costs, and spoilage and space problems? All what you need is a good “Inventory Management” system.

 Inventory management for a successful business is needed for at different levels and at almost all the branches of the business. Taking the example of a restaurant, inventory is required at different stages, starting from the purchase of raw material i.e. the cooking ingredients followed by the inventory of raw material used for various dishes to determine the usage of the raw material. Then we will require an inventory of the dishes made each day to determine the selling streak of each dish. Furthermore if the restaurant has venture into online delivery then the inventory of package material used and required is also to be made.

Therefore inventory management is most efficient way to organize and regulate business in modern era of immense competition. In the above example of a restaurant we could see how inventory management can help to determine the capital invested on a particular product or range of products and then to determine what profit we made with the products sold. Same can be the case with any other business relating to shoes, books, steel, clothes or any other commodity. INNOVENTRY adds up these features of inventory management and billing procedures to give your business the tools for deciding amazing business ideas and adding clients to your business with no discrepancy such as billing errors from your side.

We at INNOVENTRY provide you with solutions to your varied problems from billing issues to inventory management and updating. But before venturing into this amazing gift of technology to modern day business let us first understand the types of inventory management systems which can really make your business stand out from other contemporary businesses following almost the same business model or any other business as a matter of fact. 

1) Raw Materials

Every business starts with raw materials; they are the base of any business. They consist of the materials your business uses to produce its own goods.

Inventory of raw materials is important as firstly, it gives you the description and idea about the raw materials present to forecast your production of finished products and secondly, you can manage and determine the capital invested.

2) Work-In-Progress

Inventory of work in progress materials consists of the items from your raw materials that are put into the process of manufacturing them into the final furnished products. WIP inventory consists of

• Necessary materials
• Parts (components)
• Assemblies
• Subassemblies

3) Finished Goods

Then after production is complete you would require an inventory of the products post production and ready to be marketed sold to your valued customers. For example if your factory produces waffles, the packets of finished waffles is considered as the finished good.

4) Packing Materials

Most businesses need to pack a ship their finished products as seen in the above example that the restaurant for deliveries needs packing material.

Although packing materials might not seem like a significant expense. But your business does use a large amount of these supplies every day. If you don’t keep tight control of this inventory, the cost will quickly add up.

5) Safety Stock

Safety stock is the amount of product you keep on hand that exceeds what your business needs to satisfy regular demand. With good monitoring, tracking, and control, you can allocate certain types of inventory to protect against supply-and-demand uncertainties, low delivery reliability, and poor-quality components. This type of inventory cushion is called safety stock (or buffer inventory).

9) MRO Goods

MRO stands for Maintenance, repair, and operating supplies goods—these are items put in place to maintain tasks in the production process. These contribute to be one of the major components in the production process although they are not directly a part of the finished product.

MRO goods depend upon the type of business you do. For examples MRO goods for factories include gloves, safety gear, machine spares etc. and for shops include packing materials, binding material etc. Even office supplies like staples, pens and pencils, copier paper, and toner—all of the little parts that keep the wheels turning—are considered MRO goods inventory.

10) Services

Crucial to business success, service inventory includes the monitoring and management of all other types of inventory in the production process.

The principle product of many businesses is not always materialistic but there are businesses where the principle product they offer are the services they offer. For example some businesses give services like housekeeping, marketing, recruitment etc. They too need to keep account of the services they provide. 

Also businesses like insurance companies and automobile or appliance servicing companies need to be on their toes with their schedules and services they have provide, service inventory helps in them.

Your business will be able to rest assured knowing the production process is on a continuum and that your employees will always be on hand when needed. Now that’s what you call service inventory!

11) Transportation

If your business is about the transport sector then this kind of inventory is for you. If your business involves transporting of goods and materials from one location to other, this kind of inventory is a must for you. Merchandise shipped by truck or rail can sometimes take days (or even weeks) to go from a regional warehouse to your retail facility.

Inventory in transit must be accounted for when it comes to supply and demand, along with the timelines for those demands to be met. If you are into any business then you need an effective inventory management system and INNOVENTORY can help innovate your inventory maintenance procedure in the most optimum