SAP Business One Inventory Management vs. Inventory Control

Running a manufacturing business means you must have a well-maintained inventory. Inventories are the largest components of an enterprise and occupy most of the business. The turnover of any manufacturing business is largely governed by the turnover of the inventory. So, but naturally, inventory that helps in maximizing profits covers the most significant place among other assets.

In this blog we will outline what is inventory management, problems face by businesses, inventory control, and lastly difference between them.

What is an Inventory Management?

The process of ordering, storing, using, and selling a company’s goods where, raw materials components, sub-items and final products are managed is referred as the inventory management. Managing and tracking the lifecycle of an inventory is not easy. It has to take note of complete processes right from raw materials intake to final product being sold. Maintaining stock levels from understocking and overstocking is as important as such. There exist different types of inventory management and which one works best for you depends on your manufacturing business needs. Hence implementing and practicing inventory management in your organization can help businesses in fulfilling their order accurately while decreasing costs.

Problems faced by the manufacturing companies while managing inventory:

1. Maintaining larger inventories for smooth production and sales operations
2. Due to cost issues, SMBs face investment issues which leads to minimum or small inventory.
3. Controlling multiple inventories.

What is Inventory Control?

Inventory control is mostly seen and used for and by the e-commerce businesses. A curial part of managing and tracking the company’s goods with the help of supply chain is known as inventory control system. However, the inventory control system is a part of inventory management process wherein taking control of the overall stock movement becomes crucial for better management. With inventory control, businesses get the benefit to automate their inventories which will help ease a lot many processes. This provides them the accuracy of keeping their stocks at optimized levels.

1. FIFO (First in, first out)
2. LIFO (Last in, first out)
3. FEFO (First expiry, first out)

These are the three methods of inventory control designed in order to fulfil the consumer requirements.

Difference between inventory management and inventory control:

1. Inventory management has a wider scope and Inventory control has a limited scope of management.
2. Inventory management works on forecasting the overall process while inventory control manages the inventory which is already present in the warehouse.
3. Inventory management takes care whether the correct inventory set is kept in the correct place at the correct time whereas inventory control takes care whether the warehouse inventory is in better condition.
4. The major goal of Inventory management is to manage the product demands while maintaining healthy relationships with the vendors and suppliers. The main goal of Inventory control is to keep track of the goods that are stored and make sure whether they are in usable condition or not.

Note before choosing an inventory that the system fits rightly with your company size and needs.

To know more about inventory management feature in SAP Business One, reach out to SoftCore Solutions; the best SAP Business One Partner in Delhi.

SAP Business One for automotive businesses is an ultimate tool that tends to fulfil all your needs.

Contact us today!