The Important Role of Inventory Management in Supply Chain

Role of Inventory Management in Supply Chain is something like we manage items required for our kitchen. In every organization, we need to monitor all the required material at each plant and yards. The manager ensures that the required material is available in all areas including raw material, work in process, finished goods, packaging material, etc. To keep a record of the transactions, the generation of reports and compare with sales, production, and the forecast is included in the Role of Inventory Management in Supply Chain. For this, we must require software such as ERP to monitor and track each SKU and its related transactions from raw material to sales.

Key Terms of Inventory Management 

1. Economic Order Quantity
2. Minimum Order Quantity
3. FIFO and LIFO Method
4. ABC examination
5. Just-In-Time inventory
6. Safety Stock
7. Re-Order Point
8. Six Sigma
9. Demand Forecasting 

Tips for Effective Inventory Management

• Organize your inventory 
• Tracking of items data
• Review Inventory
• 80/20 Inventory Rule
• FIFO

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