Inventory Control and Inventory Management

Similar but ultimately different

Regardless of the industry that your business is in, one of the universal truths of operating a successful business is optimized inventory management and control of inventory. While the terms can seem alike initially, their few similarities become overshadowed by their core functions. This dichotomy isn’t a bad thing. Experts agree that proper inventory management involves inventory control methods; the two must work together to optimize their operations fully. This goal can only be accomplished through accurate inventory management to reap the full advantages of an inventory control system.

The Difference Between Inventory Management and Inventory Control

Let’s try an analogy first. Inventory management is responsible for the broad spectrum of tasks involved in restocking and regulating inventory. Similar to grocery shopping for your family. Ideally, you would purchase for a week or two at a time to not waste any food. While also consider your home’s needs and wants, like a company’s customer base generating supply and demand.

In contrast, you begin to plan meals and put the like items together in the freezer, pantry, and fridge. The process of creating meals and putting the food away is the same as inventory control. Ultimately, it all involves controlling the inventory on hand. At the same time, inventory management is the method of replenishing stock, forecasting supply and demand, along with a broad array of other tasks.

Inventory Control In Different Industries

One of the primary objectives of inventory control is to optimize the items already stocked. One of the advantages of an inventory control system is all about knowing what you have inside and out. Knowing inventory levels, locations, what condition things are in, and much more. All these factors can significantly affect the way manufacturing and distribution companies, in particular, operate.

For example, small to medium businesses can have multiple tiers of inventory such as consumable items like toilet paper and copy paper, raw materials like metal and wood, finished food sale items, and potentially many other forms of inventory based on the business. Distribution companies sometimes use unique categorization for inventory items based on size, color, expiration date, and other factors. Knowing how to group inventory based on different departments’ data gives businesses the edge in this fast-paced, next-day delivery world.

These methods are not exclusive to manufacturers and distributors. Similarly, nonprofit and food-based businesses utilize inventory control methods but with added conditions and parameters. Nonprofit companies are required by law to document nearly every action taken by their business, especially when it comes to their accounting and financing. Providing accurate financial reports for a nonprofit can be a huge hassle. When a nonprofit uses apt control methods, tracking stock and other assets helps optimize the allocation of its limited funding. Additionally, food-based businesses like restaurants and food distribution companies that operate seasonal inventory use different inventory methods for various cost-saving measures. Inventory control, when executed correctly, can provide crucial insight into supply chains and inform every department in a business.

Advantages of Inventory Control System

There’s no doubt that successful businesses employ proper inventory management, but can you accomplish that without a suitable inventory control system? After all, inventory control is all about optimizing the inventory you have in stock. Can you expect your inventory to work for you if you aren’t in control of it? To use another food analogy, in professional kitchens, they use a concept called mise en place, which translates to “everything in its place.” In inventory management, mise en place is inventory control, making sure the inventory is in its place.

Sadly, this is not always the case. Experts have estimated that approximately 43 percent of small businesses don’t track their inventory at all. As a result, they are missing out, to say the least, missing out on potential profit, minimizing waste, and increased customer satisfaction. How does inventory control accomplish those? By integrating with inventory management software. They are two sides of the same coin and genuinely complete one another. By using even simple common sense inventory management and control methods such as FIFO (first-in, first-out) and LIFO (last-in, first-out), businesses of all kinds can operate with total efficiency.

What To Look For

While it can be overwhelming, there are some features that you want to look at regardless of the industry. Those include:

• Automated Tasks: Thanks to modern advances in AI technology, automating various inventory tasks has never been more straightforward. The key to efficiency is ensuring that time-consuming or tedious activities are automating their execution.
• Comprehensive Reports: Inventory management and control work in tandem. Having a robust array of reports will inform you of when things are out of sync and provide a better understanding of day-to-day operations.
• Regular Auditing: By running periodic inventory audits, businesses can identify issues before they become problems.
• Advanced Tracking: Software should aid a business in tracking their products by any categorization they need, by site, location, serial number, lot, date, and more.
• Other Features: These should be based on your industry and include multiple location management, serialization, handheld scanner connectivity, and different software integrations.

Experience the Kechie Difference

At the very heart of the Kechie ERP is the Inventory Management module. A robust piece of software that manages not only the most complex and unruly warehouses but comes fully integrated with other modules to become an overall business improvement system. Kechie is cloud-based, allowing businesses to manage and control inventory from any web browser-enabled device. The team of experts at My Office Apps strives to ensure the success of all our users. Contact us today to schedule a demo and see how we can help improve your business today.