INVENTORY MANAGEMENT & WAREHOUSING

 

What Is Inventory Management?

Inventory management is the practice of planning the buying, storing and selling of stock-whether it’s raw materials, parts or finished goods—to ensure the right type and amount of stock is available without holding excess stock and thereby tying up cash. When done correctly, inventory management saves companies money. more info

Different between inventory management and warehousing.

Inventory management provides a high-level view, while warehouse management focuses on the details of the movement of stock.

What Is the Main Purpose of Inventory Management?

The primary purpose of inventory management is to ensure there is enough goods or materials to meet demand without creating overstock, or excess inventory.

What Are the Advantages of Inventory Management?

1)Better Inventory Accuracy

• With solid inventory management, you know what’s in stock and order only the amount of inventory you need to meet demand.

2)Reduced Risk of Overselling

• Inventory management helps track what’s in stock and what’s on backorder, so you don’t oversell products.

3)Cost Savings

• Stock costs money until it sells. Carrying costs include storage handling and transportation fees, insurance and employee salaries. Inventory is also at risk of theft, loss from natural disasters or obsolescence. 

What is warehousing?

Warehouse inventory management is a process that involves receiving, storing, and tracking inventory in a warehouse; managing warehouse staff; and optimizing storage space and costs; all of which directly impacts fulfillment, shipping, and the customer experience. more info

 Advantage of warehouse?

• Warehousing help meet urgent demand
• Warehousing helps keep goods safe
• Warehousing helps keep your food from going bad

CHEA-EE INDUSTRIES  INVENTORY MANAGEMENT & WAREHOUSING

  We will talk a little bit about inventory management and warehousing by looking at how they handle inventory in their factory. Chea-EE industries has made it a rule that incoming goods must be used up before new ones are brought in. This is because Chea-EE industries buys wood to make furniture, and they only make furniture when a customer orders it. This is because they don't want to waste anything and also want to give the customer the best quality possible. Usually, the lead time is at least two weeks. This has also shown them how smart they are at storing wooden goods. Chea-EE industries will also count how many wood and iron tools have been used this month. This will help them figure out how much more they need to buy next month based on how many customers order next month. Chea-EE industries does a cycle inventory, which is based on stock and orders to use unused or damaged stock instead of the old one to keep the quality of every piece of furniture in their warehouse.

  Next, move on to the safety stock process. The materials that come from the factory must be in good shape, and the safety stock can also make sure that there are enough materials. However, there could be problems if the customer's order suddenly goes up that month, causing them to have to cycle materials and add more to the warehouse. Chea-EE industries also uses a small amount of the just-in-time (JIT) process, in which they quickly make the furniture that the customer has ordered so that they have time to sort the furniture and also do a durability test on the furniture to see if any of it is cracked or not strong enough so that they have time to fix it. This is a good example of inventory management by Chea-EE industries, and it will also make their furniture business more efficient.

 Next, the MRP process is used at Chea-EE industries to make sure that all scheduling goes smoothly. Scheduling will make it easier to organize furniture products and know how much is made in a day. Every time they make a piece of furniture, they figure out how many tools are needed. This makes it easier for them to order from the factory and saves money. Chea-EE industries also makes sure that all goods going out and coming in are enough so that there are no problems when making furniture. Once a piece of furniture has been made, it will be labelled with the name of the customer who ordered it. This way, there won't be any confusion when the furniture is delivered. 

  Inventory management has become very advanced to meet the growing challenges in most businesses. This is because every business wants to make a lot of money and keep the quality of its inventory high. Chea-EE industries will also set up their service system and check to see if there are any problems if the furniture is finished but doesn't meet the customer's needs. They have made sections in their warehouse, and each one, from the cutting section to the measuring section to the packaging section, is well organized using the department system method.