Field inventory management commonly known as inventory management is the function of understanding the stock mix
of a company and the different
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
s on that stock. The demands are influenced by both external
factors and are balanced by the creation of
A purchase order is a commercial document and first official offer issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services. It is used to control the purchasing of products and services from externa ...
requests to keep supplies at a reasonable or prescribed level.
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation.
Inventory management is a discipline primarily about specifying the sha ...
management is important for every other business enterprise.
Retail supply chain
Inventory management in the retail supply chain follows the following sequence:
# Request for new
In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
from stores to head office,
# Head office issues purchase orders to the vendor,
# Vendor ships the goods,
A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. They are usually large plain buildings in industrial parks on the outskirts of cities, t ...
receives the goods,
# Warehouse stores and distributes to the stores,
# Shops and/or consumers (e.g. wholesale shops) receive the goods,
# Goods are sold to customers at the shops.
Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software.
SaaS is con ...
inventory management software is a tool to help efficiently manage stock. While the capabilities of applications vary, most inventory management applications give organizations a structured method of accounting for all incoming and outgoing inventory within their facilities. Organizations may save costs associated with manual inventory counts, administrative errors and reductions in inventory stock-outs.
Often tracking stock just through sales and returns is not enough for retailers and does not meet the demands of customers multichannel expectations. Customers expect retailers to have real-time knowledge of stock availability. This can be a challenge for retailers who may have on-line as well as bricks and mortar outlets.
A good inventory management system
will be able to list all stock options with a size colour matrix as well as give live reports on best or worst sellers, supply chain and sales staff.
Many large organizations use sophisticated ERP system
s such as Oracle EBS
for inventory management. Stock modules in these ERP systems provide many of the options needed to manage inventory.
The stock size needs to correspond to the amount of products which are sold. If the stock is too large (especially with perishable
goods as fruit, vegetables, ...) there is a risk of financial losses as some of the inventory may spoil while sitting in the store
. To reduce this risk (and keep financial losses as small as possible), there is hence benefit in precisely recording the weekly purchases of the shop's customers. This can be done through purchases tracking
per individual shopper.12 Sneaky Ways That Big Retailers Track Your Every Move
Supply chain management
In commerce, supply chain management (SCM) is the management of the flow of goods and services including all processes that transform raw materials into final products between businesses and locations. This can include the movement and sto ...
* Document automation
* Warehouse management system
* Storage management system
* Automated identification and data capture
* Economic order quantity
* Economic lot scheduling problem
* Newsvendor model
* Vendor-managed inventory
* Scan-based trading