Inventory control is about knowing what you have, where it is, and what it is worth and is a critical step on the path toward having a complete Enterprise Resource Planning system.
Know What You Have
Knowing what you have is the first step in creating an inventory control system. Without this knowledge, you cannot know if you have too much or too little inventory and both conditions cost money.
Know Where It Is
Knowing where something is can be as important as knowing whether you have something. Ideally, inventory should be stored where it is used/sold. When that is not possible, knowing where it is stored is critical. Having inventory in one warehouse when it is needed across the country does not do any good.
Know What It Is Worth
Inventory represents a significant investment to most businesses, and knowing what it is worth at any given moment is key to optimizing your return on investment. Knowing that you have an over stock of one product and a shortage of the other can allow you to make real time decisions on pricing and generate faster turns, increasing your return on investment.
Prepare For The Future
An inventory control system is the foundation upon which an integrated Enterprise Resource Planning system is built. With proper inventory controls, a Supply Chain Management system can be constructed generating an even higher rate of return from your investment in inventory.
Conclusion
Knowing what you have, where it is, and what it is worth is an absolute necessity in today's agile markets. Being able to make real time decisions on pricing informed with greater knowledge of your inventory gives you an advantage in the market place.