What is the role of Inventory Management ?


As inventory accounts for significant cost within an organization it is unsurprising that many companies have departments whose primary objective is the management and optimization of materials – while this is a wide raging activity which may vary from company to company there are a number of common objectives that are often encompassed by the function. This includes:

1. Their delivery of service levels to customers by ensuring inventory is available in accordance with need.
2. Forecast future stock requirements

3. Optimize stock levels ensuring a correct mix of stock type and quantity to meet budgetary and service level requirements.

4. Provide visibility of inventory throughout the organization and supply chain

A number of factors can influence the focus of inventory management notably industrial sector, customer, organizational structure (decentralized for example) and influence of external factors such as globalization.
A number of tools and models are often used these include

1. ABC Analysis
2. Min/Max
3. Demand Planning
4. Runners, Repeaters and Strangers