An inventory management team or manager is responsible for controlling the incoming and outgoing products or items of a company’s inventory. An inventory manager tracks and control to inventory to ensure that items in stock have a certain quality and standard before the customers receive them over the counter or in the mail. The manager is also responsible for preventing the loss of income due to poor inventory items or products.
Sufficient Inventory and Supply Tracking
One objective of an inventory manager is to ensure that the inventory is stocked at all times to suit the needs of customers. This includes inventory systems that keep track of products ready for sale and inventories that track supplies or raw materials to create the final product. The company can lose sales and customers if products are not readily available when customers need them.
Minimizing Unnecessary Capital
All of the items in a company’s inventory are considered assets, because of the monetary value attached to the items. If the items in the inventory system expire or do not sell, the items become a less valuable or even a liability. An inventory management objective is to ensure that the inventory items are used when they have the original value, so the company does not lose money by having the inventory.
Maintaining Production Levels
Another objective for an inventory manager is to have a steady continuity in production, if the items in the company’s inventory are raw materials or supplies for creating the products being sold. Production can slow down, if the inventory is missing raw materials or runs out of supplies. If the business is lacking finished products for sale, it is losing money from the lack of sales. The objective could also be to have a steady production schedule to stay on track.
Minimize Wastes and Losses
An objective could be to conduct quality control to prevent losses and wastes by manually tracking all items in inventory. Inventory items may have an expiration date, rot or develop mold, break in the inventory hall or simply not satisfy company standards.
Having waste and valuable losses is one of the major risks of running an inventory in a business. Losses can occur during the production stages due to employee theft or simply because the items have expiration dates.
Storage of Items
While losses and damaged inventory happen in most businesses, a large part of the damage can be prevented by storing items in a proper manner. An objective for an inventory manager could be to properly store inventory items and materials in a safe and effective manner. For instance, items that can rot and develop mold or have a paper-like texture should not be in a damp area.
- What are the objectives of inventory management?
- Inventory Management Objectives
- Masao Nakamura, Sadao Sakakibara and Roger Schroeder. "Adoption of Just-in-Time Manufacturing Methods at U.S.- and Japanese-Owned Plants: Some Empirical Evidence," pages 230-231. IEEE Transactions on Engineering Management, 1988.
- Electronic Code of Federal Regulations. "Regulation S-X, 17 CFR Part 210: Sec. 210.5-02 Balance sheets." Accessed Aug. 1, 2020.
Based in Toronto, Mary Jane has been writing for online magazines and databases since 2002. Her articles have appeared on the Simon & Schuster website and she received an editor's choice award in 2009. She holds a Master of Arts in psychology of language use from the University of Copenhagen in Denmark.