In advanced manufacturing landscapes, it is an injustice to your business not to automate your inventory. To receive a better return on Investments, one needs to spend on Managing and controlling Inventory first.
Though both terminologies seem identical in Inventory Management and Inventory Control, they are very different procedures in a manufacturing unit.
Key Takeaways
- Inventory management is the process of ordering, storing, and using a company’s inventory, while inventory control is the specific technique used to monitor and maintain optimal stock levels.
- Inventory management focuses on the entire supply chain, whereas inventory control emphasizes preventing stockouts and overstocking.
- Effective inventory management requires accurate inventory control to ensure smooth operations and minimize costs.
Inventory Management vs. Inventory Control
Inventory management is the process of managing the entire lifecycle of inventory, from procurement and storage to distribution and sale. It helps to minimize the risk of stockouts or excess inventory. Inventory control helps to ensure inventory is used effectively leading to improved profitability.
The term Inventory Management refers to the process of storing, ordering, utilizing, and selling a company’s stock. This process includes managing various components like raw materials, finished goods, warehoused items, and Work-in-Progress.
Active forecasting and re-ordering raw materials are the recurring tasks under Inventory Management.
Inventory Control refers to the method of regulating the stock level in the company. It helps to avoid the risk of stock-out in an organization.
It also ensures whether the quality of stock is saleable or not. Inventory control is a day-to-day process in a company’s warehouse to protect against product wastage.
Comparison Table
| Parameters of Comparison | Inventory Management | Inventory Control |
|---|---|---|
| Meaning | Inventory Management is a process of forecasting and re-ordering goods in a company. | Inventory Control is a method of regulating the stock level in a company’s warehouse. |
| Purpose | The purpose of Inventory management is to maintain a balance between demand and supply. | Inventory control helps to avoid the risk of wastage and theft of goods. |
| Scope | Inventory Management has a wide scope of activity. | Inventory control is performed on a daily basis. |
| Focus | The Focus of Inventory Management is When to order? How much to call?, and From whom to Order? | Inventory Control is focused on the prevention of stock from damage and spoilage. |
| Monitoring | Inventory management is performed weekly or monthly as per the business size. | Inventory control is performed daily. |
What is Inventory Management?
The term Inventory Management refers to the entire process of monitoring inventories, from the buying of raw materials to the selling of finished goods.
It helps to avoid the glutes and shortage by streamlining the ordering activity. The 2 prominent ways to manage inventory are JIT (Just In Time) and MRP (Material Requirement Planning).
The shortage or mismanagement of inventory is detrimental to an organization’s reputation. An effective Inventory management software works wonders in the growth and development of a manufacturing unit.
It is supported by ERP management software in big companies. It helps the company to recognize How much quantity to order and at what time?
Inventory Management keeps a track record of goods from purchasing raw materials to selling final items. Balancing the stocks plays a very significant role in a company’s management.
There are mainly two major benefits of Inventory Management, i.e., Saves money and Improves cash flows.
It is a critical term that denotes the Right stock, the Right time, the Right place, and for the Right purpose at the correct price. By controlling and overseeing purchases, Inventory management helps the supply chain’s smooth flow.
What is Inventory Control?
Inventory Control refers to analyzing the appropriate amount of Inventory maintained by a company to ensure minimum wastage of stocks.
It mainly aimed to decrease the number of slow-selling goods in the company and increase the number of high-selling goods. It saves time and money by avoiding damage, theft, etc.
The extraordinary expenses can be avoided by using an Inventory control system in the company. It saves the company from making a rash decision that results in losses.
Complex Inventory control cannot be handled through Pen and Paper system. It requires separate software or Excel sheets. There are ample software services in the market for overall inventory control.
Inventory should be in a well-managed condition and is checked through the process of Inventory control.
The optimal amount of each stock, raw material, and finished goods present in the store or warehouse is derived with the help of an Inventory control system. It monitors the usage and movement of Inventory.
The ultimate goal of this process is to track out maximum gains with optimal stocks in the company. Since it manages the already available inventory in the company, it has no relation to sales or purchases.
Main Differences Between Inventory Management and Inventory Control
- Benefits: Inventory Management helps streamline the ordering process in a company, and Inventory control helps track the daily stock record in a warehouse.
- Ideal Usage: Inventory Management works better with the help of ERP software. On the contrary, Inventory control can be performed manually.
- Responsibility: Inventory Management is the task performed by the Inventory Manager, whereas Inventory Control is performed by the usual storekeeper or warehouse keeper.
- Mode of Operation: Inventory Management gathers near- and real-time inventory data using barcode or RFID to locate stockouts and overstocks. And Inventory Control uses barcodes or RFID to track and record inventory dealings.
- Output: Improvement of warehouse layout and stock storage results from Inventory Management, and Inventory control sends alerts about low stock levels or expiration dates.
References
- https://pubsonline.informs.org/doi/abs/10.1287/mnsc.36.4.490
- https://www.sciencedirect.com/science/article/abs/pii/S037722179600255X
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The article makes a good point about the benefits of inventory management and inventory control, however, it could also delve into potential challenges that these processes might present within a manufacturing company.
The explanations of inventory management and inventory control are very well detailed in this article. It provides a comprehensive view of the processes and their operations.
The article does a great job at outlining the significance of inventory management and control in a systematic manner. It provides clear insights into the importance and objectives of both processes for a manufacturing company.
The comparison table provided in the article was really useful in understanding the scope and focus of both inventory management and inventory control. It helped me differentiate both these crucial aspects of managing stock.
I agree that inventory management and inventory control are essential processes in any manufacturing company. Both need to work together in order to achieve a balance between demand and supply.
This article’s informative content provided a great understanding of inventory management and control. It offers meticulous details on the processes, benefits, and ideal usage for both aspects, making it a valuable read for those involved in manufacturing operations.