What are the common misunderstandings in inventory management? How can inventory management be done well? Broadly speaking, inventory management refers to the management of all valuable assets of an enterprise, including raw materials, semi-finished goods, finished goods, land, human resources, time, and so on. However, many enterprises still understand inventory management only at the level of managing materials and products, while ignoring the management of other assets, which brings losses to the enterprise to varying degrees.
Misunderstandings in Inventory Management: Misunderstanding 1: The scope of performance assessment is too narrow Symptom: personnel engaged in inventory management do not understand customer demand, and daily planning is often based on statistics of order shortages, which is a completely passive behavior pattern. Today's rapidly changing market requires enterprises to actively conduct inventory planning to meet current demand. If customer needs cannot always be met within the specified time, they will turn to competitors. Misunderstanding 2: Letting underqualified employees manage inventory Symptom: every company faces the challenge of inventory planning. If untrained employees are allowed to manage inventory and make decisions, it will cause inventory waste. Inventory management is a skill, and practitioners need to receive corresponding training in advance and continue learning in actual operations. A lack of professional training is a very improper practice for an enterprise. Misunderstanding 3: Forecast management lacks standardized processes Symptom: if no one is responsible for the forecasting management process and there is no accurate information feedback, there will be no accurate forecast. This will cause inventory planning to become disconnected from customer demand, creating the risk of being unable to complete orders and possibly affecting customer satisfaction. Misunderstanding 4: No internal communication Symptom: sudden events such as promotions and new product launches are not communicated to all relevant departments. The company does not use the same system internally, which makes it impossible to identify the source of problems and apply the right remedy. Misunderstanding 5: Too many SKUs, Stock Keeping Units, scattered in various places Symptom: the proliferation of SKUs usually becomes increasingly apparent over time, and enterprises need to streamline them and rationally plan inventory.
How to Do Inventory Management Well:
1. Inbound management. Inbound management refers to confirming inbound transactions according to different business types, including purchasing, sales returns, transfer-in warehousing, and so on. Strictly review the model, quality, place of origin, measurement standard, price, and quantity of inbound products. 2. Outbound management. Outbound management refers to confirming outbound transactions according to different business types, including transfer shipments, wholesale, purchase returns, and so on. Carefully verify quantity, quality, category, and customer destination according to the outbound document. 3.Profit and loss management. Profit and loss management refers to managing product defects, deterioration, and stocktaking gains and losses. Regularly produce product profit and loss reports, clean up profit and loss products, and establish a dedicated area for such products.
4. Stocktaking management. Stocktaking management includes printing stocktaking lists, entering physical counts, including manual entry and handheld data terminal interface entry, generating stocktaking forms, and querying stocktaking data. Monthly, quarterly, and year-end stocktaking should be carried out to form stocktaking statements. 5. Early warning management. Early warning management is the management of warnings for product inventory quantity, shelf life and freshness, and slow-moving or fast-moving product conditions. Set blue, yellow, and red warning lines and issue warning reports in a timely manner. 6. Query and analysis. Query and analysis include inquiries into inventory accounts at different levels, inventory structure analysis, and inventory age analysis.
The above introduces the common misunderstandings in inventory management and methods for doing inventory management well. In fact, enterprises can now choose some professional information-based management software for inventory management, such as the well-known Soonfor F19 Furniture ERP Management System, in the furniture industry. It is an advanced and mature information-based management system for the home furnishing industry. It integrates a large number of application functions unique to the industry and provides comprehensive custom tools for process design, interface design, report design, and database design. It is a flexible customized platform management system.
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