After all, what is efficient inventory management and why is it important?

In an increasingly globalized world marked by intense competition, inventory management is one of the biggest challenges companies face today in their quest to meet customer demands and stand out. inventory management It is one of the aspects of the business that deserves special attention and its poor management could put the company's survival at risk.

A well-managed inventory means, in short, having the right materials and products in the right quantity to quickly serve the market/customers and at the same time contribute to good financial health, due to its strong influence on cash flow.

Excessive stocks, slow-moving materials (outputs) or even stopped materials, negatively impact cash flow, require higher costs with controls, storage, in addition to possible losses/obsolescence. Very low inventories can lead to product shortages, lost sales, customer dissatisfaction, and production shutdowns, for example.

Therefore, inventory management needs to be dynamic, following the market movement, periodically reviewing inventory policies, optimizing operational processes and the relationship with its supply chain suppliers.

Once this is done, the benefits are many, including: inventory management Integrating sales, logistics, supplies, finance, and accounting generates better results for the company, increases financial performance with better purchasing, reduces losses, improves cash flow, and even guarantees customer service, maximizing profits and business value.

It is also essential to ensure control over the accuracy of the products that are stocked, their organization and the best distribution of these items, are initiatives that can generate a high financial impact on your business.

Here are some practical actions that can be taken:

• Analyze the needs for quantities of raw materials to maintain the minimum necessary and not stop production;
• Know the needs of the sales department's demands;
• Monitor merchandise turnover, defining minimum and maximum quantities in stock to avoid losing sales;
• Implement procedures and controls for entry, storage, warehouse requests and shipping;
• Equalize purchase and sale terms to optimize cash flow;
• Ensure that all transactions are properly recorded in the company's accounting records;
• Use technology to ensure the efficiency of implemented controls.

Sources: 

How to manage your inventory: Sebrae, https://www.sebrae.com.br/sites/PortalSebrae/ufs/sp/cursos_eventos/como-fazer-a-gestao-do-seu-estoque,fdea4c64814fc510VgnVCM1000004c00210aRCRD. Accessed on November 9, 2020.

What is inventory management: Definition, importance, and 7 tips for greater efficiency. Siteware, 2000. Available at URL https://www.siteware.com.br/processos/o-que-e-gestao-estoque. Accessed on 09, November 2020.