An inventory control system is an integral process in any organization that is responsible for all the tasks related to inventory, purchasing of inventory items, and storage of inventory items, shipping and a lot more. Many people mix the inventory control system with inventory management. However, there is a huge difference between the two.
If you run a business you will know how important it is to have basic inventory control. A basic inventory control encapsulates all the materials, items or goods your business holds for either reselling it or repairing it. Therefore, basic inventory control is all about asset management, inventory forecasting, inventory valuation, future inventory, demand forecasting, price forecasting, physical inventory, space for inventory, quality management, and many other demands. Therefore, balancing all these can be a difficult task.
Importance of inventory control system:
An inventory control system is considered to be very important for a company that wants to increase the efficiency of the workers and the productivity of the entire company. Customer satisfaction is another important goal of any business that can easily be achieved with the help of an inventory control system.
The inventory control system is always there to make sure that a company always has the right inventory available at the right time that makes the customers of the company get what they want. There are many other techniques that work in coordination with this system to make it more effective.
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Types of inventory control system:
Basically, there are two types of inventory control systems:
- Perpetual inventory system
- Periodic inventory system
Perpetual inventory system:
The perpetual inventory system generally keeps track of the entire inventory on a regular basis. This system is responsible for updating the inventory of the business whenever there is an addition or removal of an item from the inventory. This system is preferred by many organizations as this system keeps the inventory always up to date
Periodic inventory system:
This type of control system keeps track of inventory in the beginning and at the end of the reporting period. In other words, the inventory is not monitored regularly. Businesses that prefer saving time often use this system.
If you run a business and need the most basic inventory control for your business you will need a basic inventory control template. These templates have different sections that have all the information on different aspects of your inventory thus helping you out control and manage the items effectively. For example, one section or sheet of the inventory control might be about the price forecasting of the inventory.
Thus for one year if the price of an item says $10, the next year it may increase to $14 and then the following year drop back to $10. All of this will be mentioned in the inventory control template. Therefore, if you ever need to check up on the price rise or fall for that item, all you will need to do is open it and go through the inventory control.
Basic inventory control is a very important document for running a business efficiently and smoothly as the inventory control shows the entire inventory picture of your specific business.
Benefits of inventory control system:
This control system is such a methodology that has proven benefits. Some of them are:
- This system provides all the data which is needed in order to take complete control of the inventory.
- It enables a business owner to identify all the items available in the inventory.
- With the help of an inventory control system, the businessman can easily document and report the inventory items.