Inventory Management and Inventory Control must be designed to meet the
dictates of the marketplace and support the company's strategic plan. The
many changes in market demand, new opportunities due to worldwide marketing,
global sourcing of materials, and new manufacturing technology, means many
companies need to change their Inventory Management approach and change the
process for Inventory Control.
Despite the many changes that companies go through, the basic principles of
Inventory Management and Inventory Control remain the same. Some of the new
approaches and techniques are wrapped in new terminology, but the underlying
principles for accomplishing good Inventory Management and Inventory activities
have not changed.
The Inventory Management system and the Inventory Control Process provides
information to efficiently manage the flow of materials, effectively
utilize people and equipment, coordinate internal activities, and communicate
with customers. Inventory Management and the activities of Inventory Control
do not make decisions or manage operations; they provide the information to
Managers who make more accurate and timely decisions to manage their
operations.
The basic building blocks for the Inventory Management system and Inventory
Control activities are:
Sales Forecasting or Demand
Management
Sales and Operations Planning
Production
Planning
Material Requirements Planning
Inventory
Reduction
The emphases on each area will vary depending on the company and how it
operates, and what requirements are placed on it due to market demands. Each of
the areas above will need to be addressed in some form or another to have a
successful program of Inventory Management and Inventory Control.
