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Difference between Inventory Management and Inventory Control
In order to build a successful business, one must finally take control of their stock. To some extent, this may not be a huge deal in the grand scheme of things from an economic standpoint, but it is still important enough to warrant some attention.
Companies might collapse if they lose track of their stock and run out of crucial items, or if they have too much of one thing and run out of another. To avoid this from happening, businesses regularly participate in inventory management and control operations. Both names have to do with stocks, but they do not refer to the same item.
What is Inventory Management?
These are the measures and protocols put in place to regulate and sustain a steady level of inventory on hand. This may be summed up as ensuring the right amount of inventory is on hand, that inventory is paid for on time, and that an efficient re-order point is set up. Huge stocks invite issues like theft, spoilage, and destruction, while insufficient stock can cause output drops.
Even while the vast majority of businesses still rely on the manual technique, some of the largest corporations are beginning to employ software solutions like enterprise resource planning (ERP), materials requirements planning (MRP), just-in-time (JIT), and software as a service (SaaS).
A few instances of what might be considered part of inventory management are as follows â
Remember the time to restock
Restocking Supply shelves
Quantities Requirement
When is the right time to sell?
Finding the optimal selling price
Insights about a company's present financial status, consumers' tastes and habits, and the capacity to predict future trends may be gained via the management of inventories.
What is Inventory Control?
Inventory control refers to the process of creating and implementing measures to manage stock from the moment it is obtained until it is turned into a final product. The term "inventory management" can also be used to describe this activity.
It's important to maintain just the right level of inventory control so that the cost of inventory doesn't skyrocket due to having too much on hand, but there also isn't enough to affect production levels or quality. To that end, it strikes a balance between the final products and the optimal storage capacity. So, it's important to set a reorder point for all stock.
The following are some of the most prevalent areas in which inventory control is important â
Raw materials availability â This guarantees that there will be an adequate supply of raw resources for production.
Finished goods availability â This not only improves overall consumer happiness but also maintains price stability.
Work in progress â The reduction of inventory that is already in the production process is made easier with the assistance of inventory control. This may be accomplished by cutting down on the size of the jobs as well as the amount of time spent traveling with the merchandise.
Reorder point â At this predetermined level, it is time to place a new order for more merchandise. It needs to be adjusted to a level that is just right, one that is neither too low nor too high.
Bottleneck enhancement â It is sometimes unavoidable for there to be impediments to one's capacity to raise output, a phenomenon that is more often known as a bottleneck. This is avoided by placing a buffer in front of the bottleneck obstacle, which is accomplished through the use of inventory control.
Outsourcing â When it comes to making judgments about third-party providers, such as suppliers, inventory control may be quite helpful.
Differences â Inventory Management and Inventory Control
The following table highlights how Inventory Management is different from Inventory Control â
| Characteristics | Inventory Management | Inventory Control |
|---|---|---|
Definition |
Inventory management encompasses a wide range of practices aimed at controlling stock levels through a combination of forecasting, ordering, and replenishing. |
Inventory control refers to the process of creating and implementing policies and procedures to manage stock from the moment it is purchased until it is turned into a final product. |
Scope |
Managing an inventory involves keeping tabs on when certain products run low, what should be refilled, how much should be created when certain items should be sold, and at what price. |
The word "inventory control" refers to the management of goods held in a warehouse. Keeping track of what's in stock, where it is in the warehouse, and that it stays in pristine condition is all part of this rule. |
Conclusion
Although there are a few key differences between the two, inventory management and control are inextricably intertwined. If both of these work, it will be much easier to acquire what is needed when it is needed and to sell it off at a reasonable profit.
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