Inventory Planning managing records with other benefits

INVENTORY PLANNING BENEFITS

Business managers pay attention closely to inventory due to its huge impact in their various businesses. It’s has its impact on various daily routine activities or on other planning like Supply Chain Planning, Demand Planning, Sales and Operations Planning (s&op)   The creation of forecasts in other to know how much inventory should be available to meet the demand of the consumer is known as Inventory planning.

Inventory control is defined as the process by which managers keep records of inventory items.

Facts

Internal procedures and policies for inventory planning are usually created by business owners. When managing the company’s inventory, the procedures and policies must be followed. Procedures and Policies give an outline on who can make inventory orders and methods to deal with outdated goods. Several benefits can be derived from inventory control and planning when companies implement them.

Here are the benefits of Inventory Planning

Improved Cash Flow

Companies can manage their cash flow with the help of inventory planning. Large amounts of inventory cannot be purchased by small businesses due to lack of large capital. Procedures and policies are implemented by business owners limit inventory spending. Improvements in cash flow can also be derived from buying the available lowest cost inventory.

Higher Profits

Higher profits can be generated by business owners when they implement inventory planning. When the right inventory type is purchased to meet the demand of the consumer, it can increase profitability in the business. Companies can generate higher profits when they sell via their whole inventory a number of times every year. The outdated inventory amount can be limited by the implementation of inventory planning & control.There must be a disposal of obsolete inventory by the firm. When obsolete inventory is written off, loss is created on the account statement.

Prevents Stealing

Inventory planning enables an organization to adopt better strategies that will aid them to control products right from manufacturing site until the products are available for consumers to purchase.The inventory policies adopted will deter staff from abusing inventory. Usually, when the work environment is loosed, inventory items can be stolen by the employees.The business will certainly make a loss when inventory items are stolen by the employees.

However, such cases cannot occur and the profit can be continuously made when the right inventory procedures and policies are followed judiciously. Normally, in inventory planning, latest technology is adopted by businesses in managing inventory.  The latest technology is able to receive, order, manage, sell and also receive inventory. When this software is employed, it deters the employees from stealing any product which means that no further losses will be incurred by the company.

Inventory planning is the most important aspect of any business. Therefore the right inventory planning strategies must be implemented by business owners so as to make more profit as well of reducing inventory shrinkage issues.Increase in gross profits can be enhanced by the reduction of stock shrinkage's since the firm is able to meet with the consumer demand. When the company implements this, it can enhance high return of investment and improved cash flow.

Considerations

Business technology should be implemented by Business owners to enable them manage inventory. The business software can enable business owners to save time when managing inventories. This will increase the business profitability.