4 Categories of an Inventory Management Tool
When people talk about an inventory management tool, it is easy to be confused. There is an unlimited number of subjects that deserve discussion as an inventory management tool. They fall into four categories:
- - software,
- - hardware,
- - theoretical management models, and
- - audit systems.
Having all four properly integrated and working in harmony is the job of the experienced inventory manager. Sometimes this requires the manager to be a change agent, bringing a new inventory management tool into a facility or an organization.
Software
The backbone of inventory management in any organization is the inventory control software that maintains the systemic record of product location, quantity, inventory transactions, and resupply orders.
While some organizations are small enough to use a spreadsheet as their primary inventory management tool, most are databases with a menu-driven user interface. Some organizations use off-the-shelf software, while others have internal development teams. Business model differences call for different solutions.
Hardware
The software requires input to manage the inventory. Servers, desktops, dumb terminals, RF devices, asset tags, RFID tags, scannable bar code label printers, and Point of Sale devices can all play a role as an inventory management tool. Selecting the right tools to balance labor versus infrastructure is part of the art of inventory management.
Theoretical Inventory Management Models
From independent to dependent demand to the specific science of calculating safety stock, the models available to the logistics community are critical tools of inventory control. Whether it is an upper level model of the entire system or the local tactics on how to execute periodic reviews, having a framework is critical to inventory success.
Audit Systems
Audit systems are the space where lean manufacture meets your warehouse. This critical inventory management tool is where you measure your success rate. What you audit depends in a large part on how you define success. Both individuals and overall processes need regular reviews to ensure that both people and process are in line with organizational goals.
Each of these four critical categories represents the legs that hold up the work-space that is your inventory. Whether you are a distributor of end-products or a manufacturer supporting a production facility, failure to leverage the power in each of these categories can be costly in ways difficult to calculate. Mastered, and they take your organization to the next level.
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