INVENTORY MANAGEMENT 

GROCERY STORE

Inventory management is a system used to oversee the flow of products and services in and out of an organization. Businesses utilize inventory management strategies to create invoices and purchase orders, generate receipts and control inventory-related accounting.

How Inventory Management Systems Work in Grocery Store:

    If you're standing in the middle of a big retailer such as Wal-Mart, and you look around, you're witnessing one of history's greatest logistical triumphs. Retailers such as Target, Lowe's and Best Buy stock tens of thousands of items from all over the world. Wal-Mart's system helps it maintain its signature "everyday low prices" by telling store managers which products are selling and which are taking up shelf and warehouse space.

       Inventory management systems are the rule for such enterprises, but smaller businesses and vendors use them, too. Mismanaged inventory means disappointed customers, too much cash tied up in warehouses and slower sales. Factors such as quicker production cycles, a proliferation of products, multi-national production contracts and the nature of the big-box store make them a necessity.

Modern inventory management systems must have the ability to track sales and available inventory, communicate with suppliers in near real-time and receive and incorporate other data, such as seasonal demand. They also must be flexible, allowing for a merchant's intuition. And, they must tell a storeowner when it's time to reorder and how much to purchase.

OBJECTIVES:• Sufficient Inventory    One objective of an inventory management 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    Another objective for an inventory management 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.

WHY INVENTORIES?

     Inventories are needed because    demand and supply can not be matched for physical and economical reasons. There are several other reasons for carrying inventories in any organization.

• To safe guard against the uncertainties in price fluctuations, supply conditions, demand conditions, lead times, transport contingencies etc.

• To reduce machine idle times by providing enough in-process inventories at appropriate locations.

• To take advantages of quantity discounts, economy of scale in transportation etc.

• To decouple operations i.e. to make one operation's supply independent of another's supply. This helps in minimizing the impact of break downs, shortages etc. on the performance of the down stream operations. Moreover operations can be scheduled independent of each other if operations are decoupled.

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• To reduce the material handling cost of semi-finished products by moving them in large quantities between operations.

• To reduce clerical cost associated with order preparation, order procurement etc

INVENTORY MANAGEMENT TECHNIQUES

Inventory Management Techniques and Their Importance

An inventory is a warehouse or storage location where a business maintains stocks of its products so that it can ensure swift delivery of those products on the order. With the ever increasing demand in products, more and more management practices have evolved to ease the process of product procurement by the customer. Highly efficient delivery systems and supply chains are developed to ensure efficient delivery of the products to their consumers. In the current scenario when customer satisfaction and service have become a prime reason for a business to stand apart from its competition, the need for effective inventory management is largely seen more as a necessity than a mere trend. Project management is a field of management that deals with the effective management of various types of projects.

  • First, a mismanaged inventory can lead to an unnecessary increase in the working capital. The excess funds could have been fruitfully directed to fuel the company’s growth initiatives or research and development efforts.

•Second, effective inventory management would lead to low storage costs, which will in turn lead to an increase in the company’s profits. Storage space is expensive; if you are able to manage your inventory well and able to reduce the amount of goods that you need to store, then you will require less space, which will in turn lead to low warehouse rental costs.

To understand the various inventory management techniques it is crucial to know why it is important.

• Third, it can help you satisfy your customers by providing them with the products they need in the swiftest manner. Poor inventory management leads to lower availability of goods and higher delivery time. Hence, if you want to gain those service satisfaction stars, you need to manage your inventory well.

• Fourth, goods stored in inventory over a long period may spoil. This leads to unnecessary overheads in operating a business. Hence, proper inventory management can help you reduce those costs greatly.

• Fifth, if you have inventories scattered in various locations, you need a proper system to manage those inventories on the basis of demand and supply. Inventory management techniques can help you go a long way in managing multiple inventories.

Just in Time (JIT)    As the name suggests, the JIT inventory management technique says that the item will be ordered only if it is needed for shipping or manufacturing. The item may be ordered a few days back depending on the delivery time promised by the supplier.A mandatory requirement of this approach is the proper identification of each item before the manufacturer or reseller requires it. Since, there can be many goods required by supplier or manufacturer at any time, each and every future requirement should be properly identified and timely ordered

There are several components to JIT that deserve mention in

the text:1.Production in Small Lots:2. High Quality in Delivery 3. Business Setup Time4. Excellent Preventative Maintenance5. Commitment of Supplier on Timely

Delivery6. Employees with a Flexible Attitude

• Dropshipping     The method involves a seller making a dropshipping contract with another company. The best part of the technique is that there is no need to bear the cost of inventory; the seller can directly transfer the order to a dropshipping company, which will then take the responsibility of delivering the item to the customer. The seller receives a certain percentage of the sales that he can make. The downside to this method is that the seller does not have any control over the shipping of the item and cannot cross check the quality of the shipment.

    This is an age-old method of managing inventories; the method relies on the principle that if you purchase goods in bulk, you are able to procure them in much lower costs. The method can only be employed if a business is sure that he will be able to sell that product. If a product is in high demand then you should consider using this inventory management technique which is sure to save you much money.

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Procuring Bulk Shipments

However, there are a certain pointers that should always be kept in mind if you really want to

successfully manage your inventory:

• Do not maintain too much inventory in your warehouse. If a certain quantity of product is needed after a year, do not go forth and unnecessarily bear its storage costs for one whole year. Make use of the different accurate forecasting methods to help you efficiently procure the goods in a timely manner before demand escalates.

• Make sure that you track your inventory items properly. Using bar codes and inventory tracking software you need to make sure that there are no counting errors that were incurred while accessing an inventory. Inaccurate tracking can lead to a false promise to customers, who will give you a difficult time if you are not able to fulfill your promise of delivering the order on time.

• You should always use proper inventory management software to manage your inventory. Even if you own a small business, you will need to have the proper software with data backup modules to help you manage inventory efficiently.

• You should always have a backup plan in case of system failures. Also, you should backup your inventory data into remote systems so that there is no accidental loss of inventory data. A good backup plan can go a long way in making your inventory management more efficient process.

•Order products on the basis of priorities. The products that are in most demand should be ordered first and so forth. If you keep on randomly storing products in your inventory, then you will unnecessarily incur huge storage costs

ABC analysis

   The ABC Analysis is a business term used to define an inventory categorization technique often used in materials management. It is also known as Selective Inventory Control. Policies based on ABC analysis:

A ITEMS: very tight control and accurate records.B ITEMS: less tightly controlled and good records.C ITEMS: simplest controls possible and minimal records.

• The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall inventory cost while also providing a mechanism for identifying different categories of stock that will require different management and controls.

• The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance.

• 'A' items are very important for an organization. Because of the high value of these ‘A’ items, frequent value analysis is required. In addition to that, an organization needs to choose an appropriate order pattern (e.g. ‘Just- in- time’) to avoid excess capacity.'B' items are important, but of course less important than ‘A’ items and more important than ‘C’ items. Therefore ‘B’ items are intergroup items.'C' items are marginally important

Inventory Control System

An inventory control system is a set of hardware and software based tools that automate the process of tracking inventory. The kinds of inventory tracked with an inventory control system can include almost any type of quantifiable good, including food, clothing, books, equipment, and any other item that consumers, retailers, or wholesalers may purchase.

What is an Inventory

Control System?

Modern inventory control systems are almost exclusively based on barcode technology. Though barcodes were initially developed to automate the process of grocery store checkout, their ability to encode a wide variety of alphabetic and numeric symbols makes them ideal for encoding merchandise for inventory applications. Inventory control systems work in real-time using wireless technology to transmit information to a central computer system as transactions occur.

• What Industries Use Inventory Control Systems?     Inventory control systems are employed in a wide variety of applications, but they all revolve around tracking delivery of goods to customers. Inventory control is crucial in retail stores, especially those with a large number or variety of merchandise items for sale. Inventory control is also used in warehouses to track orders and shipments, and for automated order processing. Other important applications of inventory control systems are in manufacturing, shipping, and receiving.

• Why is Inventory Control Important?     Inventory control is important to ensure quality control in businesses that handle transactions revolving around consumer goods. Without proper inventory control, a large retail store may run out of stock on an important item. A good inventory control system will alert the retailer when it is time to reorder. Inventory control is also an important means of automatically tracking large shipments. For example, if a business orders ten pairs of socks for retail resale, but only receives nine pairs, this will be obvious upon inspecting the contents of the package, and error is not likely. On the other hand, say a wholesaler orders 100,000 pairs of socks and 10,000 are missing. Manually counting each pair of socks is likely to result in error. An automated inventory control system helps to minimize the risk of error. In retail stores, an inventory control system also helps track theft of retail merchandise, providing valuable information about store profits and the need for theft-prevention systems.

How Does an

Inventory Control System Work?

      Automated inventory control systems work by scanning a barcode either on the item. A barcode scanner is used to read the barcode, and the information encoded by the barcode is read by the machine. This information is then tracked by a central computer system. For example, a purchase order may contain a list of items to be pulled for packing and shipping. The inventory control system can serve a variety of functions in this case. It can help a worker locate the items on the order list in the warehouse, it can encode shipping information like tracking numbers and delivery addresses, and it can remove these purchased items from the inventory tally to keep an accurate count of in-stock items. All of this data works in tandem to provide businesses with real-time inventory tracking information. Inventory control systems make it simple to locate and analyze inventory information in real-time with a simple database search.

• GOIS Pro is an advanced system software, which is designed as a complete inventory solution. This free inventory application boasts many useful tools and features which caters all the inventory needs of a grocery store. If you are running a grocery store, it is advisable to use GOIS Pro as your inventory software. This application is capable of managing your inventories in a well managed way.GOIS Pro is an advanced inventory application which can be accessed and controlled from various mobile platforms and devices. There are many other useful features of Goods Order Inventory System Pro which can help your inventory management requirements

Common Components of an Inventory Control System

Real Time Tracking- This application features real time tracking. This tool enables the user to keep an eye on his current stock status and in-transit orders. A user can monitor the inventories, even on the go, on his Smartphone or tablet. This reduces the possibilities of over stock of any particular item.

   Bar Code Scanning- It is an advanced bar code scanning inventory application. The user can specify a unique bar code to a product for maintaining its individual identity. Later, S/he can perform the bar code scanning process directly from his/her Smartphones or tablet’s camera. With GOIS Pro, you don’t have to purchase any other hardware for bar code scanning operations.

Multi-Platform Support- GOIS Pro can be accessed on various platforms and devices, including Macintosh, Linux, Windows PCs/Laptops, Apple iPhone/iPad and Android Smartphones & tablets. 

Multi-user Support- Goods Order Inventory System Pro supports up to 25 users together on its single dashboard. This means that 25 people can together control inventories of any enterprise. GOIS Pro multi-user support is highly secured. 

Cloud Storage- GOIS Pro serves up to 500MBs of Cloud Storage to its user. The user can utilize Cloud Storage capacity to store important data inventories. Also, these inventories can be accessed from any part of the sphere on a compatible device. 

Database Management- This inventory software is also a complete database management system software. The user of GOIS Pro can manage its important database without any hassle using GOIS Pro. 

 S/he can also store important information, including contact details of vendors and suppliers in a secured way using GOIS Pro

THANK YOU!!!