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Inventory management process

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Inventory management process

Inventory management which consists of the cooperation of several activities so that

businesses are able to perform in an efficient and smooth way, is recognized as the core of

successful operating for businesses in different types of industries. Speaking at its core is the

matter of fact that this event is constituted of rather complex processes like forwarding a

demand forecast, making a strategic procurement, arranging an efficient storage, performing

a precise monitoring and distributing goods on time. Scholars such as Becerra, Mula, Band

and Sanchis (2022) put forward a situation of rapidly changing requirements of sustainable

inventory management across supply chains. They then underline that there is a rising trend

of a transition towards a higher level of recognition of environmental and social issues among

businesses. This changing pattern just reaffirms the importance of improving resource reuse,

limit the waste production and bring sensitive acts of sourcing to the spectrum throughout the

inventory lifecycle.

In the retail sector stock management is very important because by using stock

management companies can arrange the stock they need to satisfy customer's demand and on

the other hand they can avoid spending extra money which might result due to large holdings

of inventories. Here, though, merchants confront a complex environment that involves

inventories with an advanced optimization system such as the JIT (just-in-time) inventory and

the economic order quantity being examples. As for JIT inventory, it indicates a fundamental

approach to replenishing the inventory precisely as the need arises, like vendors being

activated when customers actually require the goods, thereby preventing the necessity of

having large stocks and thus preventing further associated holding costs. On the contrary,

EOQ not only helps in finding the optimal order quantity by balancing inventory and service

level investment, as a result of which total inventory costs are minimized, yet EOQ also

prevents inventory holding and breaking costs (Gołas, 2020).

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Secondly, aside from the usual strategic operational efficiencies, well-designed

inventory management systems can lead to increased profits, increased customer satisfaction,

and environmental protection. Through sustainable planning of its stocks, the business will

regulate the operational level and strengthen customer loyalty as well as minimize

environmental impact. Sustainable approaches to inventory management at the same time

contribute to the building of the larger long-term sustainable agenda and create positive

image of the company reflecting transparency and shared values.

Nevertheless, the scene for inventory management is difficult to remain as well. The

issue that one cannot overlook, and often the most pressing one, relates to the tracking and

management of inventory data as there may be inaccuracies between the recorded level of

inventory and the true stock count, which may result in the impairment of operational

integrity and loss of revenue. Herewith, not only the demand volatility are the challenges but

in industries with their seasonal demand patterns they are formidable. Demand forecasts that

are pinpointed incorrectly can result in a huge number of implications such as storage for

excess stock becoming obsolete with write-offs or stockouts which may end up in lost

revenues and disenchanted customers.

The solutions to achieve the targeted volume of sales and ensure optimal inventory

management as well as the ability of the organizations to adopt advanced technologies,

develop talents and establish a culture of continuous improvement are crucial. Using state-of

the-art technologies such as RFID (Radio Frequency Identification), IoT (Internet of Things),

advanced analytics, businesses can improve visibility, automate the routine tasks, and use the

actionable insights to drive the right decision-making. Lastly, to achieve this, supply chain

stakeholders can be encouraged to collaborate cross functionally as this helps integrate

sustainability in inventory management systems. This in return can help the organization

capitalize on opportunity and develop long-term resilience.

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Thinking about the future, the path of inventory management is more likely to take a

technological form that involves digital, automated and consumer expectation changes. With

the goal of remaining competitive and leading the way in their areas, businesses will need to

adopt agile inventory management measures, leverage the power of predictive analytics tools,

and reinvent their supply chain networks. Via a seizing of innovation and making use of the

present side of the trends organizations can not only overcome difficulties in stock

administration but also discover new avenues for progress and sustainable worth creating.

Also in manufacturing companies managing inventories accurately is necessary for

the purpose of improving production processes features uniformity and smooth operations.

Writing by Muniz and et al (2021) contains the mixed approach technique of spare parts

provisionsing, emphasizing the need to preserve the minimal parts to avoid factory

breakdowns. Through implementing such techniques as predictive maintenance and inventory

optimization models, manufacturers have the ability to limit system downtime and to increase

efficiency of their operations.

In fact, inventory control is very critical matter in the organization but besides, some

challenges are there that it pose up. Hidayat and Saleh (2020) acknowledge the inventory

management of the pharmaceutical industry which is crucial because of product expiration

dates, regulatory compliance defected, and the variability of demand distinct it from others.

Failure on the part of the pharmaceutical companies to ensure there are sufficient stocks of

crucial medicines as well as minimize write-offs as a result of high inventory might pose

danger to the accomplishment of the set goal.

A key obstacle in stock management is inaccurate inventory, that can crop up as a

consequence of mistakes when manipulating data, loss, or theft. Opoku et al. (2020) focus on

the influence of the inventory management practices on the level of the operational

performance. They especially recommend employing the accurate tracking systems of

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inventory, as well as the regular reconciliations. Among the technologies to enter the

inventory management, the barcode scanning, RFID and inventory management softwares are

worth mentioning as they improve the inventory visibility and accuracy allowing

organizations to make informed decisions.

Volatility and demand is another critical problem for inventory management

especially for industries which have peak and unstable demand like seasonal industries.

However, Panigrahi et al. (2021) argue that demand forecasting and inventory management

strategies are vital to mitigating this risk. This necessitates adapting supply chain strategies

that are agile and versatile too, alternating items' place in market according to demand

fluctuations. Thru adjusting-inventory replenishment rules scheme allowing some flexibility

as in-supply chain configuration, organizations will be able to react timely to changing

factors in the market, as well as to customers’ changed preferences.

However, the emergence of numerous issues and inadequacies requires that

organizations not only put investments in technology, talent, and processes but also should

consider implementing the appropriate tools and strategies that will aid them in efficient

inventory management. Ruble (2021) exemplifies how implementation of ERP-technology

tools in all supply chain processes optimizes them and improves inventory performance. ERP

systems have certain functions such as; inventories managing, procurement, and the cargos

tracking. These systems supply real time reflection of the inventory level, besides smoothly

the processes.

With such a bright future, technological advancements and changing customers needs

will continue to reshape the present and future for inventory managements. Teplická and

Čulková (2020) explore the evolution of inventory management, involving the incorporation

of AI, big data analytics, and automation, all of which contribute significantly to the

development of efficiency, innovation and other operations management disciplines. Through

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employing predictions’ analytics and machine learning’s algorithm, organizations have an

ability to anticipate demand preferences, adjust stock levels to the demand, and strengthen the

supply chain stability.

In conclusion, inventory maintenance plays an important role supplying, meeting

customer needs and keeping sustainability in check. The adoption of studious practices,

technology utilization, and innovation embracement will help organizations surmount their

challenges, improve inventory practices and keep a foot higher than the competition on the

ladder of the dynamic business environment.

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References

Becerra, P., Mula, J., & Sanchis, R. (2022). Sustainable inventory management in supply

chains: Trends and further research. Sustainability, 14(5), 2613.

Gołaś, Z. (2020). The effect of inventory management on profitability: evidence from the

Polish food industry: Case study. Agricultural Economics/Zemedelska

Ekonomika, 66(5).

Hidayat, R., & Saleh, I. (2020). The importance of inventory management in pharmaceutical

practice. Open Access Indonesia Journal of Social Sciences, 3(1), 80-84.

Muniz, L. R., Conceição, S. V., Rodrigues, L. F., de Freitas Almeida, J. F., & Affonso, T. B.

(2021). Spare parts inventory management: a new hybrid approach. The International

Journal of Logistics Management, 32(1), 40-67.

Opoku, R. K., Fiati, H. M., Kaku, G., Ankomah, J., & Agyemang, F. O. (2020). Inventory

management practices and operational performance of manufacturing firms in

Ghana. Advances in research, 21(10), 1-18.

Panigrahi, R. R., Jena, D., Tandon, D., Meher, J. R., Mishra, P. C., & Sahoo, A. (2021).

Inventory management and performance of manufacturing firms. International

Journal of Value Chain Management, 12(2), 149-170.

Rubel, K. (2021). Increasing the Efficiency and Effectiveness of Inventory Management by

Optimizing Supply Chain through Enterprise Resource Planning

Technology. EFFLATOUNIA-Multidisciplinary Journal, 5(2), 1739-1756.

Teplická, K., & Čulková, K. (2020). Using of optimizing methods in inventory management

of the company. Acta logistica, 7(1), 9-16.