Inventory Management and Control system is a broad concept that deals with the process of acquiring (buying) materials from suppliers, handling (storing) it in a designated warehouse, and issuing it to production or retailers depending upon the nature of the bysiness. Basically, Inventory Management and Control System is a significant componenet of operations management in any company.
To understand the concept, lets look what inventory does mean. Inventory refers to a storable resources, such as raw materials, work-in process, finished goods, etc that are contained in a warehouse and used to meet the demands of the existing and future customers of a particular company. For this purpose, it is imperative for a company to have the proper managent and control system for its inventory so that it will be able to run its operation effectively. A company or a factory store managers need to know the number of items on their sorage shelves in order to place orders or check any losses at any givven period of time. For example, a computer manufacturer needs to know how many chips, hard disks, motherboards, etc, on hand to meet the immediate orders of its customers, or to make a timely orders from its suppliers. This task can be clearly accomplished by implementing a good Inventory Management and Control System.
Companies use different Inventory management and control system, from manual counting to barcode and RFID (Radio-Frequency Identification) depending upon the nature of their operations. These days, it is less likely to see companies using manual counting for their inventory mananagement because it is so tidious and time taking. Most companies nowadays use a barcode and RFID technology along with several related softwares. RFID is a microchip embeded in a product's packing list or label, which like a barcode stores a data about the item to which it is attached. Barcode refers to series of lines and numbers used to record information about an item. For example, when you buy certain items at Target store, cashiers scan the barcode attached to the items and check you out. During that process, as the barcode is scanned and checked out, the system automatically adjusts the balance of the inventory for that particular item including its cost and sales value.
In today's business environment, many companies use these technologies by large to effectively manage and control their inventory.
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