What is inventory management?
Inventory management allows you to control the physical assets that the company has at each site, to assign a value to them and to make them available to the personnel who need to use them. This control is essential for calculating fixed assets, planning purchases for maintenance work and identifying obsolete equipment that could be sold, transferred or disposed of.
There are different inventory methods that are used depending on the needs and working environment of each client. Thus, we distinguish between
Analyse ABC : This method consists of dividing products into three categories according to their importance, quantity and value:
Type A articles : They are the most important of the stock, whether sold or used. They also generate the most revenue. They represent approximately 20% of the total inventory, but their value can be up to 80% of the total inventory.
Type B articles : They are of secondary importance and the revenue generated is lower relative to A-items. They represent 40% of the total number of items and about 15% of the total value of the inventory.
Type C articles : They are of minimal importance and have low returns. These products may represent 40% of the stock but account for only 5% of its value.
FIFO method o
or "first in, first out"is an inventory system that consists of issuing the first products that were purchased. Its objective is to ensure that the stock is constantly renewed. This minimises the risk of deterioration, devaluation or expiry of goods in the warehouse and ensures stock rotation.
3 EOQ method
Or Economic Order Quantity. This method is used when the company has a constant de-mand and frequency of inventory usage over time. Its main objective is to reduce inventory costs by following a very simple principle: Calculate the ideal size of an order, minimising the total associated costs. It is assumed that the demand and lead time are constant and known.
So, as we have seen, there are different types of inventory management. However, all of these methods can be facilitated by the adoption of a quality CMMS such as Matrix Engine ;)