Inventory in Indonesian means inventory. Or rather a stock of materials or goods that are stored for certain purposes such as meeting production needs or directly resold. While the meaning of management is a management system that aims to make something truly effective. If seen from these two terms, then inventory management is a management system that is related to all material or goods inventory activities in a company. There are several activities carried out in this management system, including checking and providing stock of goods and raw materials. In the company, inventory management is included in the process which is important and cannot be released. How not, with the existence of inventory management the company is able to plan and control the stock of goods and materials for profit and smooth business. In addition, inventory management also has other benefits, namely:
Avoid stock shortages. Poor inventory management allows a company to lack stock of raw materials or goods to be sold. The company will lose the opportunity to obtain profits. With good management, the company can anticipate shortages and delays in the stock. So that whenever production will be carried out or customers come to buy, the stock is well available.
Anticipating a shortage of stock outside. Inventory management will also help companies to provide stock in anticipation if what is needed is not on the market.
Improve marketing. Complete materials for production as well as goods that are available every time a customer asks will certainly increase a company’s marketing. In addition, if the company is always able to meet customer desires when needed, customer satisfaction is getting better. Which led to the company’s reputation which also continues to increase.
Service improvements. Integrating stock with sales through inventory management will allow automation to meet demand easily. The company will be able to respond to customer requests quickly because it will automatically be connected to the availability of goods in warehouses and stores.
Inventory control. Inventory management in collaboration with accounting software enables instant access to important inventory data so that it can be used as a controller. With this collaboration it will be known the availability of inventory, the amount available, the amount that must be ordered again, and the costs that can be known at that time also for inventory. The availability of this data has an impact on the ease of decision making regarding inventory and costs required.
Types of Inventory Management
In addition to the considerable benefits, the types of inventory management are also quite diverse. Some of these types include.
1. Raw Materials (Raw Goods)
Raw material is the first type of inventory. Management must be able to ensure the availability of this raw material because it is something that must exist. Without the availability of this material, production in a company will certainly be hampered. Inventory management must ensure the availability of raw material stock for the production process.
2. Processed Goods (Half-Finished Goods)
Semi-finished goods are the second type needed in inventory management. Still related to the production process, semi-finished goods will usually be distributed to other factories to be processed into finished goods. Inventory management is used to determine how much goods are needed to be distributed in order to meet market demand and according to production schedules.
3. Finished Goods
After the production process uses raw and semi-finished raw materials, finished goods are produced to be marketed. To get the maximum profit, management needs to adjust the amount available, distribution channels and the amount needed according to market conditions.
4. Supply of Goods
Supply goods are other types of goods that must be managed by inventory management. These goods must be managed properly and sorted which ones will be used for production and which ones will not.
In inventory management, merchandise must be clear on the amount and distribution channels.
Besides these five types of goods, there are two types that are also managed by inventory management on the demand side. First is raw goods and semi-finished goods. And the second is finished goods.