Purpose of Inventory Management

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Purpose of Inventory Management

INVENTORY MANAGEMENT must tie together the following objectives ,to ensure that thereiscontinuitybetweenfunctions: •Company’sStrategicGoals

Inventory Management must be designed to meet the dictates of market place and support the company’s Strategic Plan . The many changes in the market demand , new opportunities due to worldwide marketing , global sourcing of materials and new manufacturing technology means many companies need to change their Inventory ManagementapproachandchangetheprocessforInventoryControl.

Inventory Management system provides information to efficiently manage the flow of materials , effectively utilize people and equipment , coordinate internal activities and communicate with customers . Inventory Management does not make decisions or manage operations, they provide the information to managers who make more accurate andtimelydecisionstomanagetheiroperations.

INVENTORY is defined as the blocked Working Capital of an organization in the form of materials . As this is the blocked Working Capital of organization, ideally it should be zero. But we are maintaining Inventory . This Inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasingpricetendencyofcommoditiesorrebateinbulkbuying.

Traditional Supply Chain solutions such as Materials Requirement Planning , Inventory Control , typically focuses on implementing more rapid and efficient systems to reduce the cost of communicating information between and across the Inventory links in the SCM.COM focuses in optimizing the total investment of materials cost and workload for every Inventory item throughout the chain from procurement of raw materials to finished goods Inventory . Optimization...
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