Inventory Management Definition Features

Inventory Management Definition Features

Every company needs to manage its inventory to know what products it has and whether there is enough inventory to remain able to deliver. Inventory management is an essential part of the overall business process.

Inventory management system refers to the management of stocks, i.e. of goods that a company owns. This includes, for example, raw materials, finished products and goods. Inventory management includes the planning, procurement and warehousing of inventories. It serves to avoid bottlenecks and minimize storage costs.

Inventory Management Features

Inventory management system

All relevant information about a company’s products is collected in inventory management. This includes, among other things, the stock levels, the supplier data and the master data such as item number, item description and prices. The sales figures and data are also stored in inventory management or can be derived from the material movements.

Inventory management is, therefore, an important tool for keeping track of what a company has to offer. Inventory management has various functions. On the one hand, it serves as a source of information for management. Based on the data collected, decision-makers can see which products are performing well and which are not. On the other hand, inventory management helps with the planning and control of production. By knowing the current stock levels, orders can be placed in good time, for example, to avoid bottlenecks.

Inventory management is, therefore, an important part of corporate management. It helps to keep track of what is on offer and to obtain crucial information for planning and controlling production.

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