Why Is Inventory Management in Goods Production and Delivery Very Important?

November 20, 2018

When it comes to goods production and delivery, it is vital to manage your inventory in an accurate fashion. Otherwise, you will constantly have shortages or overages of your goods depending upon their demand status. Both can lead to issues that can decrease your profits. Today, there are computerised methods that assist you with tracking of incoming stock, on-hand stock and outgoing stock in order for you to know the status of your inventory at all times for production and delivery efficiency.

Precise Inventory Management Effectively Uses Working Capital

One advantage of precise control of inventory is that it effectively uses your working capital. You will not order goods when you have sufficient quantities of them. Instead, you reserve your funds for only those goods that are low in stock.

Accurate Inventory Management Prevents Shortages on In-Demand Goods

Inventory management when performed accurately keeps you from suffering shortages of in-demand goods. You will retain your customers’ loyalty by trying to carry a stock of these at all times.

Inventory Management Prevents Overages on Slow-Moving Goods

On top of not suffering shortages of fast-selling goods, you will not have overages of slow-moving goods when you practice accurate management of your inventory. Ordering too many of low-sellers decreases your profits and places unnecessary strain on your operating budget.

Inventory Tracking Points Out When You Need to Expand Your Available Warehouse Space

Tracking always is part of effective inventory management. A benefit of performing it is that it will indicate when you need additional warehouse space to store your goods. While you can expand to a larger facility to accomplish this, it is the pricier way to do it. It is more cost-effective to work with a third-party warehousing company for this additional space.

Managing Your Inventory Accurately Helps You Ship Orders in a Timely Fashion

Through keeping your inventory at the right level for all goods, you can ship all orders in the timeliest fashion possible. Customer satisfaction will soar to new heights if you have had trouble in the past with inventory inaccuracies.

Inventory Management Also Helps You Gain Additional Operating Capital

Most financial institutions require accurate inventory records as part of loan applications for additional operating capital. You need to understand this point before you apply for your next loan.

For additional information about why inventory management in goods production and delivery is very important, rely on Challenge Packaging and Warehousing Solutions. We specialise in a full line of warehousing, packaging and inventory services that help you with your distribution needs.

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