Why is Inventory Management important?
The importance of inventory management depends on your perspective. If you are customer focused, having the ability to satisfy customer product requirements in an accurate and timely manner is hugely important. Customers can be significantly disappointed when expectations are not met. Inaccurate inventory information can contribute to this.
From a return on investment perspective there is a need to ensure items are bought and sold at the right prices to ensure profit.
For the stewardship perspective there is a need to safeguard the assets of an organisation on behalf of the owners. Having a robust Inventory Management system is imperative for this.
If an organisation is wishing to incorporate best practice / structured processes and workflows in their approach to business, an Inventory Management system may assist with this. The system forces the use of rules and disciplines that contribute toward best practice.
All businesses have a need to comply with local rules of accounting and taxation. They need to use systems that maintain standards for reporting transactions based on the generally accepted rules. Inventory Management systems can provide this with ease when used correctly.
Contemporary business practices often involve the use of sophisticated technology. This might be through websites, EDI, and interaction with courier systems and third-party warehouses. An inventory management system allows for the connection of multiple threads of technology to the core system to ensure ease of transaction processing.