It’s generally only suitable for the smallest of retailers. Periodic inventory management is far from ideal.
This is the only way to spot any discrepancies that could be damaging to the bottom line. Any decrease in inventory would need to match up with sales figures or wastage. They will typically also calculate the financial value of the stock, as well as raw materials on-site.Īt the point of each stocktake, an organization can check that inventory levels make sense. At that time, staff will check warehouses or storerooms, and count the units of inventory on hand. Companies count their stock at consistent but comparatively long intervals.Ī typical periodic system might see a firm perform a stock take every three or six months. In fact, the name ‘stock-taking’ is perhaps a better descriptor. This is what is probably best termed as ‘old-fashioned’ inventory management. In general, though, automated inventory systems fall into two categories: Each organization has its own needs and principals. Ensuring throughout that you know what you have, where it is, and how to manage it. It’s the process by which you track goods from one end to the other along your supply chain. Inventory management systems are your means of organizing all the elements that go into inventory management. In short, everything that impacts the resources you have at hand. It’s all about tracking stock, supplies, and sales. You’ve now got an overview of the basics of inventory management and how they’re part and parcel of your day-to-day operations.