This first chapter provides a detailed background for the Inventory and Stores Management course. It introduces students to the basic concepts used in the area of inventory and stores management, and therefore, provides a foundation for the rest of the issues dealt with in the subsequent chapters.
By the end of this first chapter, students should be able to; * Define the basic concepts used in Inventory and Stores Management. * Explain the importance of Inventory and Stores Management, from an organizational perspective. * Identify the various classifications of Inventory and how these vary with the business environment.
As companies continue to strive at achieving their objectives, management is required to focus more on the area of operations management. One main reason for failure to achieve/realize company objectives (especially the financial) is unfavorable cost structures, which compromise on performance (e.g. profitability) levels.
With the increasing need for effective operations management, Business organisations now require that costs and cost centres be well managed and controlled. Consequently stores, as cost centres must be well managed. In practice firms spend an inordinate amount of resources i.e. time and money managing and directing their suppliers to ensure that critical inventory/stock control levels are maintained and the vital flow of products needs for operation continue.
In contemporary Business operating environments, significant developments have emerged in stores and inventory management aspect. Stores and inventory management is now appreciated as a value adding activity able to make a contribution to the profitability performance of an organisation if managed in a more effective and efficient manner. Therefore, companies must find ways for ensuring such effectiveness and efficiency. The use of advanced technology demands that companies go automation....