What is Inventory Management?

Inventory management is the process of efficiently overseeing and controlling a company's inventory of goods, raw materials, work-in-progress, and finished products. Its primary goal is to ensure that the right amount of inventory is available at the right time to meet customer demand while minimizing holding costs, such as storage, handling, and obsolescence expenses. Effective inventory management is essential for optimizing a company's cash flow, profitability, and customer satisfaction.

Why do we need Inventory Management?

1. Optimizing Working Capital: Inventory ties up a significant amount of a company's working capital. Effective inventory management helps businesses strike a balance between having enough stock to meet customer demand and not tying up excessive capital in inventory. This ensures that the company has the necessary funds for other important aspects of the business, such as expansion, marketing, and innovation.

2. Meeting Customer Demand: Maintaining appropriate inventory levels ensures that a business can meet customer demand promptly and consistently. When products are readily available, customers are more likely to make purchases and have a positive experience, leading to repeat business and customer loyalty.

3. Minimizing Obsolescence: Products or materials can become obsolete over time, especially in industries with rapidly changing technology or consumer preferences. Inventory management helps identify and address obsolete or slow-moving inventory, reducing losses due to obsolescence.

4. Improving Efficiency: Efficient inventory management processes can streamline the flow of goods through a business, reducing handling and storage costs. This efficiency can also lead to cost savings in labor and logistics.

5. Mitigating Supply Chain Disruptions: In the face of unexpected events like natural disasters, labor strikes, or supply chain disruptions, businesses with robust inventory management practices are better equipped to handle these challenges. They may have contingency plans in place and sufficient safety stock to weather disruptions.

In summary, inventory management is essential for businesses to maintain a competitive edge, maximize profitability, and provide excellent customer service. It allows companies to balance the benefits of having inventory on hand with the costs associated with holding that inventory, ultimately contributing to the overall success and sustainability of the business.

How should we do it with Magestore Retail Management Software?

1. How to manage the products list by the Inventory Management function?

1.1. Manage the Inventory Management list

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In this list, you can manage the products that are available in your warehouse with important information such as the qty in the current source of the product (Qty on Hand), the level that shows you should create a PO for the product to avoid the out-of-stock status (Reorder Point), the Stock Unit of that product (Measure, this field is only shown when the UoM configuration is turned on),…

In addition, to see the product details, you can click on the View button to redirect to the Product Details page

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1.2. Product details

On this page, you can edit some important information related to the product such as Qty on Hand, Stock Unit and Purchase Unit (if the UoM configuration is turned on) or Default Supplier for the product (the supplier that you often purchase the product)

2. How to add the product to the Inventory Management list?

2.1. Import by CSV

If you want to add multiple products to this Inventory Management, you can use the Import CSV function (You can only import the products by the CSV file). As you can see in the above picture, there will be the Import Type dropdown which includes 2 options: Adjust/Update and Add/Subtract. If you want to add a new product to this list or update a new qty in the source for a product, you can use the Adjust/Update function to do this. In addition, if you want to increase or decrease qty in source of a product that is available in the list, you can use the Add/Subtract function.